Dax Technical Analysis 02/02/2015

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My outlook for today and for perhaps the week will be one of patient range trading. I am currently neutral but just waiting to pull the trigger for another long position, I like the fundamentals to support a further rally. Current levels are too expensive, so I am waiting for a pullback before going long.

Plenty has been written about the fundamental reasons behind a further Dax rally and the key reasons remain that Germany is an exporting country, their products and services become cheaper to purchase with a lower Euro and the costs of transportation and shipping is lower with current oil prices. Future trade expectations are high. With ECB hogging bonds and killing the yields, investors will also be looking for an alternate place to put their money and the German equities, are one of the more attractive European propositions. But it is not one sided as uncertainty with some Eurozone states such as Greece is helping to strengthen the contrarian position and encourage the high levels of volatility. Sometimes sitting back and waiting is the best option, despite it being boring.

Support & Resistance

KEY LEVELSDifference
Daily R210877-105
Daily R110764-130
Value High10741-5
24hr VWAP1071717
34 Hour EMA10705-13
Daily Pivot10702-39
Naked VPOC10700-1
Value Low1067640
Daily S110589-64
Daily S21052727
200 Day EMA961411
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Daily Dax Analysis

We are currently stretched near to all time highs and at the top end of a rising bull channel. Price action is moving sideways and we are rangebound. The overall trend is still strongly bullish with layers of support being built up all the way down to 9500. There is plenty of room to the upside from current levels with RSI around 64, but I still think an entry from a lower position is better value.

Dax Daily Chart
Dax Daily Chart
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Intra-day Dax Analysis (30 minute)

Sideways action is clearly seen on this chart with the 34period hourly EMA still horizontal. The trading range is slowing to around 200 points 10600-10800 which opens up the opportunity to trade that range. I would be trading long when price drops to between the green lines and short when price rises to within the blue lines. Stops could be just past the S2 or R2. 10500 is still a crucial level to hold but breaking through this today opens up the 102xx for the rest of the week which is where I will be pulling the trigger to go long.

Dax Intra-day Chart
Dax Intra-day Chart
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Dax Volume Profile Analysis

Thursday and Friday shared similar ranges and similar vpocs. Both days generated normal distributions with no obvious pockets or trading opportunities. So if we were looking for possible scenarios, we are trading underneath vwap on a sell signal and there is a possibility that price may come back up to vwap and fall back down from there.

Dax Volume Profile Chart
Dax Volume Profile Chart
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