DAX Xetra (cash index)
Having broken out above the old February high of 11,371 last week, this old resistance becomes new support for corrections.
An early slip back today is unwinding some of the gains of the past week but should be the source of the next chance to buy.
However, for now, this move needs to be treated with a degree of caution.
The market has opened lower today and has already “filled” a gap at 11,480 but this could signal a minor corrective move if the bulls fail to “close” the gap.
Daily momentum remains strongly configured with weakness still seen as a chance to buy.
The hourly chart reflects this too as the hourly RSI just unwinds back towards 50 and MACD lines just begin to drifter lower from a strong configuration.
- There is considerable near term support in the band 11,320/11,392 to hold up an unwinding move.
- Resistance at 11,544 from yesterday’s high came around the resistance of the eight month downtrend which is a technical barrier yet to be overcome in the recovery.
- The strategy seems to be to look for buy signals into support around the 11,371 breakout support area.
- A move below 11,244 would be disappointing but the recovery would remain on course whilst a recovery uptrend remains intact, currently at 11,090.