DAX Xetra (cash index)
The recovery in the course of the past few sessions has taken the market tentatively back through resistance, but this remains a rally built on shaky ground.
Since the breakdown below the pivot support around 11,370/11,415, there has been a rebound from 11,300 has left a run of higher daily lows and a move back to trade decisively above 11,415 again.
However, the last two daily candlesticks have reflected an indecisive run, with the market bumping up against the underside of the old three month uptrend but also the now flat 21 day moving average which has been a gauge for the recovery previously (currently 11,540).
Momentum indicators have stabilised their corrective move lower, but are also reflecting a tentative rebound, that needs far more conviction for traders to be confident that a move higher will resume.
- The resistance of a lower high comes in at 11,624 and this needs to be breached for traction to really build.
The hourly chart shows this level to be a near term pivot, whilst it is interesting to see the hourly momentum indicators just fading their recovery.
- The bulls will be happy that the hourly chart does show that the old 11,370/11,415 band is actually forming a basis of higher lows in that past couple of sessions, meaning that 11,415 is the first support to watch.