DAX Xetra (cash index)
The DAX continues to pull higher with cautious optimism as Friday’s positive session included a close at the highest level since 16th October.
Today’s early move higher is looking to confirm the latest breakout, however, the source of much of the caution now could be the overhead supply of the old long term resistance band 11,725/11,865.
Global equities are broadly breaking higher, but how the DAX responds to this key resistance band will be crucial for the medium term outlook.
- Between 2017/2018 there was a consistent floor between 11,725/11,865 but having broken down in Q4 2018 this has become a huge barrier to gains.
- Friday’s intraday high was 11,725 meaning the market is already having a look.
Momentum indicators are positively configured with the RSI in the high 60s and Stochastics swinging higher.
The hourly chart shows positive configuration on momentum over the past week, with the hourly RSI consistently above 50 and MACD lines above neutral.
Intraday weakness is a chance to buy, with an uptrend of the past month flanking the lows.
- There is a near term pivot as support at 11,618 above the 11,555 pivot.
- The band of support at 11,370/11,415 remains key.
- A move above 11,865 would open 11,456 as the next resistance.