DAX Xetra (cash index)
After initially threatening a near term correction in yesterday’s session, the reaction of the bulls still seems to buy into intraday weakness on the DAX.
This has also come with the medium to longer term technical improvement where there has now been a closing break of the 8 month downtrend.
Although the market has turned back from the resistance of the December high of 11,567 there is a sense that weakness is a chance to buy and this resistance will again be tested.
Momentum indicators remain strongly configured, with the RSI still in the 60s, MACD lines still positive and Stochastics strong.
The breakout at 11,371 is supportive, whilst yesterday’s low at 11,442 will also be a near term gauge.
The hourly chart shows the market again opening lower today with an eye on yesterday’s low and a mild negative divergence on hourly RSI.
- However, the bulls will remain confident that this is just a near term slip whilst the hourly RSI remains above 30 and MACD lines consistently above neutral, especially if the move begins to form support around 11,371/11,442.
- Below an old mid-range pivot at 11,215 would be a concern now.
- Resistance is at today’s initial traded high of 11,510 and yesterday’s high at 11,556 just shy of the key December high.