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Small base pattern implies further recovery on the DAX


DAX futures (Dec 2017 contract is FDXZ7, continuation contract is FDXc1)

 

With two strong bull candles in a row the outlook for the DAX has completely shifted around again from the initial sharp losses of Monday morning.

The closing break back above 13,139 (with the reaction high of 13,136 and the 23.6% Fibonacci retracement of 11,865/13,533 at 13,139) the recovery is back on.

This comes with the momentum indicators decisively beginning to improve again as the Stochastics start to track higher again and the RSI is also back above 50.

The bulls will now look to use a previous band of resistance at 13,090/13,136 as a basis of support now to buy into weakness today in order to continue the recovery.

On the hourly chart there is a small double bottom reversal pattern that has completed above 13,090 which now implies around 245 ticks of recovery in the coming days towards 13,335.

  • Initial resistance is around 13,215 but it is interesting to see on the hourly chart that if that resistance can be cleared then there is very little to prevent a move towards 13,335 which is the next real resistance.
  • Looking to use corrections towards the neckline at 13,090 as a chance to buy today.
  • The bulls would now not want to lose support at 13,020.

 


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