The Dax is Bearish below 12335 and sellers are looking get short from resistance after allowing the price to complete a relief rally.
The Asian ‘crisis’ seems to have relaxed a little in comparison to last week which is likely going to encourage some buying activity. If the gap from this morning closes, then it could provide an opportunity for traders to get long at a better price.
The DAX managed to close above 12000 on Friday after a failure to do so on Thursday. This close could be significant, especially after breaking back inside the previous range (above 12085).
Although the current price is action is favouring a move to the upside, the resistance overhead will still attract selling and until 335 is taken out, we are favouring the short setups.
11930 – major support
12090 – opening range low
12085 – previous range support
12003 – Close from Friday
12149 – Composite Point of Control (7-10 days)
12175 – Wednesday resistance
12220 – 12265 – previous value area
12335 – major trend defining level
Other Dax Key Levels
Value Area Low – 11949
Point of control – 11987
Value Area High – 12013
Composite POC – 12150
Dax Bullish Strategies
Buy near support and take profits near resistance
Option 1 – Buy a failed gap close at around 12085. This is a confluence of levels (previous range support and the opening range low). The gap left behind a Low Volume Node and price will often either reject lower levels (creating a buying opportunity) or zoom straight through to the bottom of the gap.
Option 2 – Buy the bottom of the gap near 12013. This is also a confluence of levels (gap bottom, VAH from Friday and a previous High Volume Node centre).
Dax Bearish Strategies
Sell near resistance and take profits near support
Option 1 – Price has already hit a resistance level this morning, so sell on buyer failure (two attempts) if the price is unable to take out the daily high and continue the mini trend. If the price does manage to break higher, watch a reaction to 12175, especially if we see bearish divergence around that higher high.
Option 2 – Sell buyer failure around the previous value area zone