DAX Xetra (cash index)
A rebound added 74 ticks yesterday is forming a positive candle, but in the context of recent selling pressure, this has been a relatively small reaction higher whilst today’s consolidation questions the longevity of the recovery.
Momentum indicators on the daily chart remain solidly correctively configured, with the RSI struggling under 40, MACD lines tracking lower and Stochastics bearishly positioned. This all suggests that the rally will struggle and to expect renewed selling pressure to take hold once more in due course.
- The June low at 12,104 may remain intact after the pick up from 12,120 on Wednesday, but this is likely to be retested as rallies remain a chance to sell.
- There is initial resistance at 12,295/12,323 under the old support at 12,400.
However, the hourly chart suggests the rallies struggle in the 45/55 region on the RSI whilst the MACD lines continue to reflect a negative configuration.
- The support is initially at 12,182 trying to protect a retest of the lows.
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