Dax Technical Analysis 01/08/2017

Dax Outlook

Dax is still Bearish and the sellers have control right now. The target for selling was a test of the monthly low and perhaps the 12,000 psychological level, which is still out there. However, we are currently pretty close to those target levels right now. So it seems that we need to pull back to a better zone to encourage more sellers to step in. That zone could be either the high of yesterday or the highs of Wednesday/Thursday last week. Selling from higher positions seems to be the best strategy. Buying this market is a difficult job right now. In fact, the only people making money from buying right now are sellers who are closing their positions. But we are approaching key support levels and the completion of a large measured move.

The market is short term bearish below 12205 and price should break 12077 to continue the technical downtrend.

It’s the start of a new month, during summer, so I think we could see some rebalancing of positions. The new money will start to flow in and also potentially more volume (towards the end of the month) as traders come back from their holidays.

Bearish Dax Strategy

The measured move target is the 11975-12000 zone. Selling from current levels is not offering a great reward:risk ratio. So a pullback to the high of yesterday is interesting. Sellers will be looking for buyer failure up there. Particular a couple of attempts to break higher, which fail, perhaps creating a bearish divergence with an oscillator.

The current Euro strength seems to be weighing on the Dax at the moment, but a deeper relief rally up to the Wednesday or Thursday levels is still a very good price to sell and ensure that the overall technical trend remains intact.

Watch the 150 level for potential buyer failure.

A break below 12077 is not a selling opportunity unless there is strength and price holds a pullback.

Bullish Dax Strategy

To turn bullish, this market needs to show a lot of strength and hold its own pullback. The higher time frames are providing some clues about potential support, specifically the 12,000 level, the 200 EMA and the trend lines inside the fork (below), could provide some relief.

The daily low today after a gap close and the 12045 are both interesting levels for short term buying. However, I think the biggest clues for buyers will be seller failure.

Dax Charts

4 Hourly Chart - Dax Technical Analysis
4 Hourly Chart – Dax Technical Analysis
04 DAX Market Profile
04 DAX Market Profile