Dax Technical Analysis 10/11/2016

Good morning traders!

We are all already tired of discussing the election result, so that’s all I have to say about that.

One of the craziest candles I have seen on the Dax during my trading career printed yesterday on the daily chart. What makes the candle unusual is the 500 point tail which pierced the lowest levels we have seen since July, but yet closed (bullish) near to the November high. Price broke out, again, through the trend resistance from the Summer/Autumn peaks and it all looks a bit of a mess. But the election is now over, we know who is going to be the 45th President, so let’s get back to work.

Look at the daily chart, I’ve drawn a parallel to the trend resistance and placed it at the high of the previous break. Price touched that parallel this morning and seems to have been pushed back. Many traders are going short. My algorithm is bullish, looking for dips, but if I was manually trading this I would be putting a limit order in around 10800, stop above major high, targeting a mini correction of the move, perhaps two or three targets, the first being 10650.

The H4 chart has been boring for a while and even with yesterday’s crazy price action, it just highlights the massive range that we have been trapped in for a while. Right now we are at the top of that range after a huge rally and it would not be unusual for price to correct.

The H1 chart shows a pretty significant bearish divergence at range resistance, so that’s often a strong signal and on the m30 chart price nearly touched the 10800 line, the MACD is looking to turn and bearish RSI divergence is also present here as well.

The m5 chart shows that after the open yesterday, we had a very strong recovery rally and in fact not only closed the gap that was opened, but extended beyond the open. We are now sitting just above the previous range 10645-10720, remember from a week or so ago? Let’s see if we come back through that level or hold it.

I sent out a volume profile chart (pictured below) yesterday that showed two high volume areas and a pocket in between them. Yesterday there was an opportunity to trade (long) a break through the middle of the three levels all the way up to the higher of the three levels. Price did this and broke through that level. Volume profiles can be useful tools.

Dax Support & Resistance

(Pretty much useless today because of the ridiculous range from yesterday)

KEY LEVELS
Daily R211115
Daily R110887
Daily Pivot10456
Daily S110229
Daily S29798
200 Day EMA10318

Dax Charts

03-h1-dax-chart
03-h1-dax-chart
04-dax-m30-chart
04-dax-m30-chart
05-dax-m5-chart
05-dax-m5-chart
02-dax-h4-chart
02-dax-h4-chart
01-dax-daily-chart
01-dax-daily-chart
Volume Profile
Volume Profile

 

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