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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

DAX paring gains following a strong breakout is an opportunity

DAX Xetra (cash index)

After over a week of consolidation and drift, the bulls returned in force yesterday to drive the DAX for a breakout to a new two month high.

This continues the recovery from the December low at 10,279 which has added over 10% to the market, a rally that has pulled higher and now seen the bulls buy into three periods of consolidation that have all lasted around a week.

A strong bull candle breakout seems to accompany all of the breakouts and weakness is now a chance to buy.

The move higher is backed up by strength in the momentum indicators, where the RSI is into the 60s, the MACD lines are rising and Stochastics rising into strong configuration again.

  • There is effectively a band of around a hundred ticks between 11,216/11,321 of old highs which represent underlying demand now.

An early slip back today is likely to be seen as another opportunity for the bulls.

The next real resistance is the December high of 11,567 whilst the path of recovery back towards a near eight month downtrend (currently comes in around 11,650) continues.

The hourly chart shows positive configuration on momentum with RSI consistently finding a bottom between 35/45 and strong hourly MACD.

  • Initial resistance is yesterday’s high at 11,371.

 

 

Richard Perry

Richard Perry

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