DAX Xetra (cash index)
Yesterday’s recovery candle shows the bulls are still in for the fight, but there is still a renewed near term deterioration which is helping to bolster the medium term negative outlook on the DAX.
Over the course of the past week the market has fallen away on a net basis and coming under the resistance of the three and a half month downtrend (today at 12,445) the momentum indicators are also rolling over again.
Chief amongst this is the bear cross sell signal on the Stochastics which is confirming now, whilst the RSI has failed again around 60 and the MACD lines seem to be losing impetus again around neutral.
The outlook is not entirely negative though as yesterday’s bull candle suggests that the sellers are not having it all their own way, whilst today’s bounce off the early open is also encouraging.
However it is early in the session still.
Initial support is today’s low at 12,225 (all but the open) but the hourly chart shows a run of intraday rallies failing at lower levels, and momentum indicators increasingly corrective.
There is still regard being given to a historic pivot around 12,300 and a continued failure under here will add to bear pressure, with today’s early rebound high at 12,310.
A breach of 12,225 initial support opens Friday’s low at 12,190 however a move back towards 12,100 would be the most likely move in the coming days in this scenario.