DAX Xetra (cash index)
After a rebound earlier in the week, the bulls briefly had a glimmer of hope, but that seems to have quickly been extinguished as the selling pressure seems to be resuming.
The old support around 11,000 is significant overhead supply and so it seems to have been as the initial positivity which drove the market to yesterday’s high at 10,988 has been sold into.
A negative candle yesterday and a gap lower today from 10,887 has been met by the meek recovery in momentum indicators beginning to tail off again.
Rallies on the DAX remain a chance to sell.
- Filling the gap at 10,887 is a possibility but a close back below 10,800 would be a negative signal and certainly re-open the low at 10,585.
- The long term downside target from the huge top pattern completed below 11,726 implies 10,150.
On the hourly chart there is a bear cross sell signal on the hourly MACD lines around neutral, whilst the RSI failed at 60, both concerning factors if you are a bull.
At the very minimum, the bulls need a close above 11,000 to improve the outlook now and in the absence of this the DAX will remain under huge pressure.
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