Dax Technical Analysis 11/01/2016

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Good morning traders!

To get this report going, I will ignore fundamentals and just jump straight into the charts.

 

I saw one of the strongest weekly bearish candles I have ever seen, which completed on Friday, after shedding just under 1000 points on the Dax. That kind of candle, that kind of momentum may be tricky to slow down, not impossible, just not easy. We are still inside the weekly bearish trend channel after piercing to the upside (and getting rejected) towards the end of this last year.

The daily chart shows the scale of last week’s momentum and shows only a small sign of slowing up with now 6 consecutive negative days. The Friday candle seems to be an inverted hammer which can often be found at the bottom of a downtrend, ignoring the fact that the candle body is still bearish. The candle suggests bulls have started to step in, considering this is coming towards a decent buying level. I personally find the 9580-9650 zone interesting and wonder if we may find ourselves down there. I could be interested in going long there if things start to settle. I still think the 9560 is a target for bears, not only because of previous point of control in September and October 2015, but because it’s the 100% fibonacci extension from the Dec/Jan swings. It’s tenuous, but the inverted hammer could begin to confirm a turning point with the confluence of the support around this area. Oversold conditions, 6 consecutive bearish days, SPX is currently bearish and coming up on support as I write the article, USDJPY is coming up on support and EURUSD looks to be topping, all of which could suggest a buying opportunity may present itself soon on the Dax.

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We’ve kissed the lower bollinger band on the 4 hour chart, would could suggest we will see a bounce, but the final couple of candles from Friday suggest that we will ride the bollinger band down instead. Last week we crossed the regression channel median line and after closing there on Friday, we are now in the bottom half of the channel, for the first time since the September/Oct lows. The regression channel suggests price could move down to 8700 and not be unreasonably low, but of course there is strong support around 93xx.

On the 30 minute chart, the bearish trend is clearly still in tact. We bearish below 10125. Trade setups are difficult to spot on this chart, but I am watching a pullback towards the weekly pivot, or 10k, shorting with a stop around 10130, targeting a move towards 96xx. Another option I am looking at is to short from 9800 as this was a double bottom which broke towards the end of Friday’s session. So I might watch this level for a short spot, providing we don’t gap another 100 points on open (which is possible).

We are below the 34 period hourly EMA, which I use for trend identification, so I would be interested in short trades. The 10 minute chart, using the 3 and 8 EMA cross as a guide gave a few signals on Friday and is still bearish.

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On Friday, if you had the DaxTrader RSI Trading System setup on your meta trader account, using a 14 period RSI on a 1 minute chart with 65 overbought and 10 oversold levels, you could have taken quite a lot of points. This chart just shows the end of the day. There were plenty of other trades and signals there.

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Dax Support & Resistance

KEY LEVELS
Daily R210263
Daily R110009
Daily Pivot9869
Daily S19615
Daily S29475
200 Day SMA10658

Dax Charts

08 Volume Profile
08 Volume Profile
06 m5 Dax Chart
06 m5 Dax Chart
09 m10 Dax Chart
09 m10 Dax Chart
05 m30 Dax Chart
05 m30 Dax Chart
03 H4 Dax Chart
03 H4 Dax Chart
02 Daily Dax Chart
02 Daily Dax Chart
01 Weekly Dax Chart
01 Weekly Dax Chart
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