DAX Xetra (cash index)
This is now a key moment for the bulls as the market is testing key support and momentum indicators take a turn for the worse.
Unless the bulls gest a grasp of this move quickly, the outlook could begin to deteriorate sharply.
The key breakout support band between 11,370/11,440 is now a key area that the bulls need to defend.
The recent retreat has gathered momentum in the past few sessions but this breakout support is a confluence around the upside of the old downtrend which is now supportive too.
There is a deterioration in the in momentum indicators which is now developing, as near term bear cross sell signals are posted on both Stochastics and MACD lines and the RSI falls below 60.
However, the argument will be that this was similar to the early February decline that was bought into.
- Also the bottom of the uptrend channel is at 11,245 today.
- However, a breakdown below 11,370 would be a big concern now, back below the 21 day moving average too, especially with the deterioration in momentum.
- The hourly chart shows resistance band 11,515/11,556 now with a corrective configuration on hourly RSI and MACD suggesting near term rallies are being sold into now.
- Initial support at today’s low of 11,426.