Dax Technical Analysis 09-08-2017

Good morning traders!

Dax Outlook

The DAX is trading in a 240 point range, and currently respecting the LVN as resistance and respecting the 085 as major support. Looking at the 7-day composite market profile, there is a double distribution pattern within the range, leaving behind a Low Volume node in the middle. Price will often like to cut through the low volume nodes when moving from one value area to another. That explains the gap this morning.

Looking at the 7-day composite market profile (chart at the bottom), there is a triple distribution pattern within the range, leaving behind a Low Volume node in the middle. Price will often like to cut through the low volume nodes when moving from one value area to another. That explains the gap this morning.

Dax Key Levels

POC 12255
VAL – 12190.5
VAH – 12272.5
GAP – 38 points

Bearish Dax Strategy

(Referring to the 500 tick chart)

We see buyer failure at previous highs (approximately 12320) which are directly under the blue Low Volume Node, again. This means the sellers remain in control. The sellers are targeting a break below 12085 to resume the overall, longer-term, technical downtrend.

Sell at resistance and target support

Resistance is currently in three major forms:
1 – Range highs
2 – The underside of the blue LVN
3 – Shallow falling trend line

Selling from these levels is most likely an effective entry, assuming that the sellers remain in control.

Dax Support

200 (taken out) – switch-back line from bearish trend support
180 – previous low
150 – previous POC from a lower HVN
085 – Major support

Bullish Dax Strategy

We saw a strong rally yesterday in the second half of the session which threatened to take out previous highs. The move began with bullish divergence, visible on the MT4 chart below and ended with a rejection just under the LVN marked out on the 500 tick chart.

With the sellers in control, it makes the bullish strategy a little more challenging, however if we keep it simple and buy just above support, then we can use the levels in the previous section ‘Dax Support’.

If we wanted to take profits just below resistance, then we could use these:

Dax Resistance

300 – attempting to test highs
335 – Start of LVN
435 – Just below horizontal resistance

Dax Charts

500 Tick Chart

2017-08-09_0801

 

MT4 Chart

2017-08-09_0805

7-day composite market profile
2017-08-09_0812

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