DAX Xetra (cash index)
The DAX has finally joined other major markets in breaking to new multi-month highs again to open the way for further recovery.
This comes as the market has closed above the resistance at 11,371 which completed a range breakout and imply around 410 ticks of additional recovery.
It now means that a retracement into the long term pivot band 11,725/11,865 is now a realistic possibility.
There is a strength to the momentum indicators with the RSI rising into the low 60s, MACD lines tracking higher and Stochastics into strong bull configuration.
A test of the long term downtrend of the past 8 months (currently at 11,545) is now due.
- Weakness is a chance to buy, with the old resistance of the breakout at 11,371 now being supportive.
The hourly chart shows positive configuration on momentum with 40/50 on the hourly RSI being a basis of support and MACD lines consistently above neutral.
- There is a band of support 11,260/11,325 now.
- Initial resistance is at today’s traded high of 11,448 with the December high of 11,567 subsequent to that.