Bullish signals for Q2, the week and for yesterday have been confirmed. Investors buying DAX on Tuesday posted a 6th higher daily high in a row and new all-time top at 9954.5. Prices are trading above their 50 & 100 day average rates, but they are also much overstretched.
So, a profit taking pullback has to be expected. There are early signs of divergence too, so although there is no clear reversal pattern, the outlook for Wednesday is temporarily bearish and the call is to sell modestly on the open and then at 9980, with a stop loss at 10005.
Targets are to 9917, yesterday’s afternoon low, 9882, Tuesday’s overall base and then 9814, a 38% pullback to the recent gains.
