23-01-2018 Dax Technical Analysis


The Dax has completed its task of taking out the previous all-time high and starting its catch-up to the other major indices around the world. Frankly, it’s about time. Not only have we taken out the previous ATH, but we have gapped the previous ATH. We have broken through the expanding pivot formation and strongly confirmed a new higher major swing low. The breakout is an excellent sign for bulls, providing they can retain the momentum.

Moving into uncharted territory makes planning resistance levels more difficult. The 14,000 level is a clear target for many buyers. My strategy would be to take profits before 14k to avoid the potential choppy conditions.

Is it too late to buy the DAX?

It completely depends on your trading plan, your attitude to risk and your trading strategy.

The facts are, we are on a bullish trend with confirmed higher highs and higher lows, however, we are at the top of a major trend. There is potentially a lot further to go on this move, but a retracement would likely stop most people out of their trade. If you are looking for entries to get long, find an entry on a dip. Alternatively look at the minor swings (the higher highs and higher lows) and map out the second swing back. Once you have highlighted that, watch a reaction there when price pulls back. That’s a top tip right there.

Another option is to map out the previous major resistance levels that recently broke. Draw a couple of horizontal lines around there to map out a 50 point ‘zone’ (rather than a single level) of previous resistance. Markets often exhibit repetitive behaviours in bullish trends and one of those behaviours is resistance-cum-support.

Of course, buying the DAX is useless unless you’re using sound and proper bankroll management and getting the right reward: risk relative to the probability of the trading strategy you’re using.

23-01-2018 Dax Key Levels

POC *13453
Value Area High *13465
Value Area Low *13425
14 Day ATR137.11
200 EMA12645
Daily R213588
Daily R113547
Daily Pivot13479
Daily S113438
Daily S213369
*These are FXCM numbers, not futures numbers. Please be aware that FXCM can often be 5-10 points higher than futures prices

23-01-2018 Dax Charts

I can’t give all the answers away, regarding the best levels to buy (from my opinion). But these charts will provide some clues as to my current thinking.