DAX Xetra (cash index)
The strength of yesterday’s recovery is now questioning the corrective outlook for the time since in a few weeks, and the market is now at a key crossroads.
However, for a while we have been considering the old long term pivot band around 11,400/11,460 and once more this will be considered to be a key near to medium term level to watch.
Already the bulls will be enthused by the extent of yesterday’s recovery which is now putting serious pressure on an eight week downtrend but also the 11,400/11,460 pivot band (which is resistance).
Momentum indicators are responding to the improvement in the past three sessions, with the Stochastics tracking higher and the MACD lines also edging back higher.
For now this is still just an unwinding move within a continued bear market but if the RSI pushes above 50 in decisive fashion this outlook would be questioned.
- A close above 11,460 would certainly signal a shift in the outlook on a near to medium term basis and then open the old November reaction highs around 11,600/11,690.
- However, the 11,400/11,460 pivot band is a key barrier to overcome.
Today’s initial move has hit the buffers of resistance and slipped back a touch.
The hourly chart shows an improved outlook but now yet bullish near term with the hourly RSI still under 70 and hourly MACD lines threatening to lose impetus.
- If the move were to lose the support initially at 11,300 (yesterday’s low) then this would be a disappointment again, re-opening 11,230/11,260 as next support which is above the key November low at 11,009.