DAX Xetra (cash index)
Given the negativity in market sentiment that has greeted traders at the beginning of 2019, the moves on the DAX have been relatively encouraging for the bulls.
However, this does have to be put into the context of a market which remains extremely negatively configured on a medium to longer term outlook.
Yesterday’s intraday rebound into the close was remarkably resilient in forming a bullish close and a solidly positive candle.
Despite this though, the market has again opened lower this morning and once again the negative sentiment is a factor.
- The overhead supply around the old December lows 10,585/10,700 is still a feature of the near term outlook and how the market reacts to this will determine the extent of any recovery now.
Although a downtrend of the past three weeks has been broken by yesterday’s rebound, near term technical remain negatively configured.
The RSI is still struggling under 40, whilst MACD lines remain negatively configured.
Hope comes with the tick higher on the Stochastics, but far more needs to be seen in order to back the prospect of a near term recovery.
- The overhead supply 10,585/10,700 is key to this.
On the hourly chart the indicators are simply unwinding to levels of selling opportunities (hourly RSI around 60, MACD around neutral).
- Yesterday’s low at 10,387 will be a key reference now (as the early 2019 low) above the 2018 low at 10,279.