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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.5% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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DAX continues to drift towards support and an opportunity

DAX Xetra (cash index)

Despite the market breaking through the 8 month downtrend this week, there has been a slip back on the DAX in the past couple of sessions, but this move should prove to be the source of the next chance to buy.

The breakout at 11,371 is a basis of support and underlying demand now, with momentum indicators still positively configured and pointing towards corrections being an opportunity for the bulls.

An unwinding move is coming through on the RSI (which is still above 60) whilst the Stochastics are also just moving into more of a consolidation phase.

We have consistently seen throughout this recovery that the DAX will go through a period of consolidation before breaking higher (only in a couple of sessions early in February was this not the case).

There is little to suggest at this stage that this consolidation will not once more be bought into.

  • There is a band of support 11,245/11,371 which is a buy zone, whilst the hourly chart shows a pivot around 11,215.

Hourly momentum indicators are unwinding towards an area where the bulls have habitually been supportive, with the RSI around 40, the MACD lines around neutral.

The early drop back this morning has so far not developed into anything more than an unwinding move, and the bulls look ready for their next move, they just need a catalyst.

  • Resistance is 11,521 and 11,556.

 

Richard Perry

Richard Perry

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You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Please click here to view our Risk Disclosure.

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