DAX Xetra (cash index)
Selling pressure has just begun to dissipate this morning, but is this just a pause in the correction or the beginning of a renewed leg higher?
The important technical factor to watch is the support band 11,370/11,415 which is the old key February breakout and subsequent pullback low.
Holding on to this range support will maintain the outlook that corrections within the two and a half month uptrend channel are a chance to buy.
Although there is still a negative near term configuration as the momentum indicators have rolled over, it is interesting to see RSI holding in the mid-50s and MACD lines rather benign, something which adds weight to the conviction that this is likely to be an opportunity for the bulls.
- However, the bulls are struggling to get going today and for traction to build to the upside once more the hourly chart shows that the near term pivot at 11,556 needs to be overcome.
- For now the hourly RSI has ticked higher today as support has come in at Friday’s low of 11,400, but is still correctively configured and needs to move above 60 to regain some positive outlook, whilst the MACD lines (having crossed higher already) need to develop above neutral.
- The reaction high at 11,677 is key resistance that prevents a push towards the long term pivot at 11,725/11,865.