Dax Technical Analysis 13/04/2015

Good morning traders!

If my reports had an auto complete function, I would just need to begin my post by typing four letters

“Dax r”

That would be all that’s needed because the suggested sentence that my post provided would read:

Dax reaches all time high, again”.

We have seen all time highs so often lately and some are concerned that the relentless rally is sharing a worrying similarity to a bubble. A bubble which is unlikely to slow down or become controllable. I mean it’s not like the German’s are desperate for the money are they? In fact they are perhaps the most suitably positioned eurozone economy to take full advantage of the benefits and ECB don’t seem to want to slow down with their asset purchase scheme right now.

Many analysts, writers, investors and others question the sustainability, both financial and political, of the current policy and many warn of a resulting financial crisis, and I would be inclined to agree that this will be the case. But not for a while in my opinion, and perhaps that might be quite some months down the line. In the very short-term, this week I cant imagine there being any surprises from ECB policy re the asset purchase plan, but the Draghi press conference will most likely yield some dodgy unscripted Draghi-esque comment regarding the situation in Greece, which could provide some movement. I suspect that any negative movement will only be temporary until digested and the ‘train’ will continue to move forwards.

So for now, I will do what we humans do so well, and ignore the trouble on the horizon and just continue to feed the greed within me, continue to ride the bull train to 12500 and then re evaluate my next steps from there. I am still bullish, but would I buy right now? I don’t have a position, but I would like to get back in if the opportunity comes along. Right now, I wait for a cheaper price.

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Dax Support & Resistance

Lots of movement in these levels after an epic Friday breakout

KEY LEVELSDifference
Daily R212528196
Daily R112457193
Value High12399261
Naked VPOC12378284
Daily Pivot12327173
24hr VWAP12314204
Value Low12286231
Daily S112256170
34 Hour EMA12251137
Daily S212126150
200 Day EMA1039954

Dax FXI Analysis

A strong breakout to the upside signals a resumption of the rally after a few days/weeks of sideways movement. Fresh money still being pumped into the market and finding its way into German and other European equities, driving them higher despite the relative uncertainty in Greece.

So we are bullish on the daily trend, nothing changes there, we are overcooked on the four hour so 12203 is an option at the blue mid line but of course a move closer to 11865 would be preferable. On the 30 minute chart, the channel is going vertical, an unusually warped and pinched channel. I would like to see some of that trajectory flattened before buying again.

All three oscillators over 70. I’ll watch the open and see what happens, but I don’t intend buying anything at these levels.

1Dax - FXI Indicator
1Dax – FXI Indicator

Dax Daily Chart Analysis

I drew a box around price a week or two ago and we have been stuck in there for a while. Because we’ve being trading sideways for a while, I was about to extend the size of the box before price action on Friday decided that it no longer wanted to be confined to its prison and it burst out with some force. I would imagine the highs/double top would be retested and a new layer of support built and so the 12180 line is the ideal buy area for me. This line is the 100% fib extension from the previous swing. If we draw a new extension from the next swing, I suppose 13247 would be the long-term target. But let’s not get ahead of ourselves.

2Dax Daily Chart
2Dax Daily Chart
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Dax Intra-day Analysis (4 hour)

3Dax Intra-day Chart (4 hour)
3Dax Intra-day Chart (4 hour)
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Dax Intra-day Analysis (30 minutes)

The weekly pivot would be a great spot to buy for me, I am looking to go long there.

4Dax Intra-day Chart (30 minute)
4Dax Intra-day Chart (30 minute)
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Dax Intra-day Analysis (5 minute)

5Dax Intra-day Chart (5 minute)
5Dax Intra-day Chart (5 minute)
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Dax Volume Profile Analysis

If we take out the 12350 zone from Friday, there is room below to drop to 12250, although the YVAL will be stubborn to break.

6Dax Volume Profile Chart (5 minute)
6Dax Volume Profile Chart (5 minute)
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