DAX Xetra (cash index)
After a day of consolidation on Tuesday, the DAX continues to sit at a near term crossroads as the uptrend channel support is tested.
The gap breakout on Friday effectively remains unfilled at 11,149 as the market sits in a support band 11,149/11,217 with the channel support at 11,190 today.
Momentum indicators continue to sit in their strong configurations with the RSI around 60, MACD lines still rising above neutral and the Stochastics above 80.
There is though a sense that if the channel were to be breached, these momentum indicators could deteriorate quickly, suggesting that the continued trend higher is important.
Ultimately, though on a price basis, the key support is the medium term pivot at 11,000 and only on a breach with a 10,000 handle would the outlook significantly deteriorate.
The question is where the technical would deteriorate significantly before then to call for a downside move.
- For now, daily candles are fairly neutrally configured around the support band 11,149/11,217.
Furthermore, looking on the hourly chart there is still a strong configuration with hourly RSI still finding consistent support above 40, hourly MACD lines above neutral.
If this changes it would also be a negative call.
- Initial support is yesterday’s low at 11,159.
- Resistance is at 11,277 before Friday’s high of 11,321 which is preventing the continuation of the run higher.