Good morning traders!
Despite a tentative day on Monday, we had a great day yesterday as price broke and closed above 10250. With little high impact news releases this week, we have good conditions for a trend to continue. Yesterday we managed to take out the daily R4 which happens on very rarely, so price is still stretched. Bulls would either be looking to go long from current price (10260), a pullback to between 10150-10200, or a break out above 10315. Bears may either be looking to short from current position or a break below 10240.
If the move continues, and we manage to break out above 10383, we could be completing an extension around 10600 (Fibonacci extension). Some may argue that the Dax does not behave like a traditional forex pair, in terms of technical patterns and respecting levels and sometimes that may be true. But overall, I have a different opinion when it comes to these Fibonacci patterns.
Intra-day we have a couple of clusters of support 10240 (previous R3 of yesterday), 10230 (daily pivot for today), 10182 (previous R2 of yesterday) and 10145 (the daily S1), I will be looking for buying opportunities from these areas.
Yesterday, my RSI system (on a 5 minute chart, with simple settings) produced 6 signals, a combination of buy and sell, 4 of which would have won and yielded +64 points on the day, let’s see what happens today. I know that I have already had two trades (buy), which I have stopped out early because we seem to want to head lower.
Dax Support & Resistance
|200 Day EMA||10153|