DAX corrective momentum beginning to take hold

DAX Xetra (cash index)

After a few days of consolidation the DAX is suddenly coming under selling pressure, but has the outlook changed?

It would seem as though with the early break of the two week uptrend this morning and a move to a one week low, the market is turning into corrective move now.

The implications of this coming with the RSI again failing last week at 60, MACD lines only having unwound to neutral and the Stochastics giving a negative cross (although not yet confirmed as a sell signal), could now mean that momentum really does start to build for a slide back towards the old pivot band 12,100/12,130.

There is an old support at 12,300 which is a near term gauge on the hourly chart which coincides with the recent recovery uptrend.

• With the hourly chart showing a pivot is initially now 12,300/12,335 as resistance and a failure to reclaim a close above this level would be confirmation of a corrective near term signal.

The positive configuration that was previously present on the hourly RSI is turning increasingly negative again and if the hourly RSI is consistently under 40 but also failing in rebounds under 60 this would add to the corrective momentum.

• There is now a run of lower highs on the hourly chart, with the latest being 12,389.
• The next support in the move lower comes in at 12,184.