DAX Xetra (cash index)
The gains are still being squeezed out of this recovery for the DAX, but the big tests for the bulls are now ready to be seen.
Holding the recovery above the previous breakout high at 11,371 maintains the strength of the run to 12 week highs, however, can the move be sustained.
This comes with the confluence of an 8 month downtrend (comes in at 11,525 today) and the resistance of the December high of 11,567.
Furthermore, it was interesting to see the early February peak (of 11,371) coming with the RSI at 65, a level it is also now at.
Momentum is strong but given the barriers overhead, the immediate upside might struggle.
- The early gains today have been clipped back a touch with the intraday high at 11,532.
Weakness is a chance to buy and for now there is little decisive signal on the hourly chart that suggests the bulls are losing too much.
The hourly RSI falling below 50 would be a signal, whilst the hourly MACD lines below neutral would also suggest a retreat back into the support of the breakout at 11,371 could be seen.
- Initial support is today’s traded low at 11,482 whilst a minor pivot comes around 11,450.
- Above 11,567 the resistance begins to ramp up further with 11,690 and the long term pivot band 11,725/11,865.
The bulls still have this rebound, but an unwind to the breakout could give another chance for renewed upside potential in the recovery.