DAX Xetra (cash index)
Given the concerns over risk appetite that have increased recently, yesterday’s intraday rebound on the DAX shows the bulls are still fighting.
Reaction to a bullish engulfing candlestick will be key today.
It was interesting to see that the DAX closed at 11,419 which is a shade above the 11,370/11,415 pivot band means that there is a potential swing higher in process, but this needs to be backed up by a positive candle today.
A decisive move clear of 11,370/11,415 would be a key positive reaction but there are still warning signs that come with the broken three month uptrend and two day close below 11,370 in recent sessions.
This is a crucial crossroads, with the RSI picking up from the low 40s (similar to February) whilst the Stochastics are crossing higher.
If the bulls can dust themselves off and build support once more, then this could still be a buying opportunity.
- Holding once more above 11,370/11,415 pivot band is important to this.
The hourly chart has ticked higher and a mini downtrend has been breached, but this move needs to continue, in order to maintain the improvement in momentum.
- Clearly the reaction low at 11,300 is now crucial to the outlook.
- Today’s high at 11,448 is initial resistance (also yesterday’s high) before 11,517 and 11,624.