Dax Technical Analysis 16/02/2015

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Good (early) morning traders!

Capital has still been flowing heavily into German stocks recently and we have had a number of bullish events, especially towards the end of last week. Germany revealed excellent growth, above expectations and geo-political tensions could now be more under control with a ceasefire coming into effect on Saturday, 11k was broken and fall-out from Greece has been delayed and talks begin again today.

There is a large move on the way based on the compression we are currently seeing in the charts below. But it is US holiday today so perhaps today won’t see the ignition.

Here is a useful site to look at: http://www.ig.com/uk/ig-indices/germany-30

Support & Resistance

KEY LEVELSDifference
Daily R211048-89
Daily R111012-42
Value High1098538
Naked VPOC1098058
Daily Pivot1097684
24hr VWAP1097186
Value Low1095477
Daily S110940131
34 Hour EMA1091968
Daily S210904257
200 Day EMA973312
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Daily Dax Chart Analysis

We have a very small doji candle, compressed to a range of just 72 points and from here we can predict a breakout, but can not predict whether there is a further period of consolidation first. My prediction would be a pullback to at least 10800 before a continuation rally, but predictions are rarely accurate. I personally would still like to see 10500 first.

Dax Daily Chart
Dax Daily Chart

Intra-day Chart Analysis

We are pointing up on the 34EMA on the 30-minute chart and there is a decent pocket of support developing around 10900-10930 which could be stubborn, which is where the daily S1 resides. 11k is a crossroads, do we build further support and climb from here, or this the point where bulls run out of ideas, become exhausted and we have a relief rally of profit taking, sending us lower? Looking on the 5-minute chart, the Bollinger bands (based on 30-minute data) are pinching aggressively pointing towards a breakout and price is currently at the bottom of a moderately bullish channel.

Dax Intra-day Chart (30 minute)
Dax Intra-day Chart (30 minute)

 

Dax Intra-day Chart (5 minute)
Dax Intra-day Chart (5 minute)

Volume Profile Chart Analysis

We saw a large ‘P’ profile on Thursday and a much smaller compressed ‘O’ profile on Friday, beginning to show signs of a POP formation. We know that when we have a POP, we look for a drop. If we see another ‘P’ formation today then Tuesday onward we could see weakness and a drop to lower levels before the continuation rally. The arrow signals are conflicting because the range is compressed and the moving averages are oscillating around each other waiting for a break.

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