DAX beginning to range as the market dips back again 21/11/2017 #Hightrade
The sharp bounce back following intraday losses in the wake of the German political uncertainty shows that there is still an appetite to buy the DAX.
However, near term there is a trading band formation of around 250 ticks between the support of last week’s low at 12,843 and resistance around 13,090.
The broken near term downtrend adds to the argument that with the momentum indicators bottoming, there is a consolidation forming.
Today’s early drop back lower again extends this outlook.
- This would suggest that the market will now be looking for a breakout of this 250 tick range, with a close above 13,090 starting to generate upside momentum again.
- A move above the reaction high at 13,136 (which is also around the 23.6% Fibonacci retracement of 11,865/13,533 at 13,139) would be confirmation of the bulls getting back in control.
- On the downside, a close below 12,842 furthers the correction.
The hourly chart shows the importance of 13,090 on the upside, whilst the momentum indicators have just rolled over again this morning.
Given that the hourly RSI has failed again around 60, whilst the hourly Stochastics are giving a near term sell signal, this points downside today and no imminent upside breakout.
- Initial support is 13,000 and then 12,950.