DAX Xetra (cash index)
Prospects of a recovery remain on course after a positive reaction to initial selling pressure during yesterday’s session.
Closing just 16 ticks lower on the day was a positive result from having been 120 ticks lower at one stage and today’s early pull higher is helping to build confidence.
There has been an improvement in momentum seen with the RSI beginning to track higher again above 30, whilst the Stochastics are also ticking higher n a fashion very similar to moves seen during the lows of June and August.
The market has left a new low at 11,865 but there does seem to be a basing process now forming.
Potential for a recovery will continue to improve should there be a close above the initial resistance at 12,039 (Monday’s high).
The hourly chart continues to find positive divergences on hourly RSI, hourly MACD lines and Stochastics too.
- A move above 12,039 also completes a mini base pattern which would also imply around 150 ticks of further recovery if achieved.
- Initial resistance is then the old floor 12,000/12,120.
- Initial support now at 11,980.
There is a feeling that a recovery is coming.