Dax Technical Analysis 06/02/2015

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Yesterday’s article predicted sideways movement and that’s pretty much what we saw. Slight gain overall but a safe day overall, with no major levels tested. I have four trades open, but I have been scaling them out because the positions are bigger than I want them to be. I will also start publishing my trades again on twitter as I have been asked many times to do this recently.

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Dax Bearish play today:

Short from 10950, stop over 11k somewhere, target 10800. It’s actually a pretty high probability setup that at some point we are going to shed some points. The stop will be tricky because I imagine there are lots of people taking profit up there at the same time others are jumping in late causing chop but overall with speculative sentiment so heavily long, that’s normally a good time to start selling. The scalp play is shorting from 10911. The European Central Bank (ECB) announced after hours that it would no longer accept Greek sovereign debt as collateral. The ECB will offer emergency loans to Greek banks to keep them afloat but at a higher cost. And so it begins, but the real damage will still take some time.

Dax Bullish play today:

Get long from 10800 if possible, stop 10750 and target 10900+. I wouldn’t get in now because current levels are a bit pricey, look elsewhere if you want a trade. If you have a position. hold it and ride it out, move stop losses to break even and try to take some profits before NFP. Scalp play is long from 10875. We are struggling to take out the fib extension level of 10947 and the 11k zone could be turbulent with people taking profits. It may take a few days to make headway up there.
Prediction today: I am holding a long position, so subconsciously bullish, but I am on the fence.

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Support & Resistance

KEY LEVELSDifference
Daily R21101214
Daily R11095636
Value High1091125
24hr VWAP1087611
34 Hour EMA1087417
Daily Pivot1087312
Naked VPOC10866-4
Value Low1086625
Daily S11081734
Daily S21073410
200 Day EMA966513
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Dax Daily Chart Analysis

We have opened and closed inside the body of the previous candle. We are hovering just under the 10947 zone which is the fib extension and this could well be the perfect entry for a pullback. This week has been strong, it would not be impossible to see a couple hundred points shed today. Reversals/corrections normally happen at the top of large moves, after a period of consolidation (and Friday ranks as a popular day for a correction/pullback/reversal to start).

Dax Daily Chart
Dax Daily Chart

Dax Intra-day Chart Analysis

Sideways action, narrowing/pinching Bollinger bands and EMA has lined up with today’s daily pivot. Range trading would be a good strategy until a break happens.

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

Dax Volume Profile Chart Analysis

There was a lot of volume traded between 10880 and 10910 yesterday and a break under the 10880 level and then beyond the 10866, which is the value area low, could open up the deviation low of 10825. The bigger picture still dominates at the moment, and the last three or four days volume profiles have shared similar ranges. This is a period of consolidation.

Dax Volume Profile Chart
Dax Volume Profile Chart

 

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