Good morning traders!
We touched major resistance yesterday and the short squeeze continued to strangle traders as we found a high around 9550. We eventually closed almost perfectly at the open of the September 29 low last year, so perhaps this is a strong sign for bears, especially if we stay below yesterday’s high today, but of course there is plenty of bullish momentum at the moment, so it’s very difficult to pick the turning point.
Take your vote:
#dax so where are you guys at the moment? Have you taken a position?
— DaxTrader.co.uk (@DAXTrader54) February 19, 2016
We are below the 200 day EMA and the technical trend is bearish below 9926, we posted an interesting candle yesterday and it could be considered as a potential reversal signal as we are at resistance. There is a shorting opportunity from current levels with a stop above the high from yesterday and targets range from 9250-9000.
We are approaching the top of the Bollinger band making a reversal to the downside more likely, the stochastic indicator has crossed and providing a selling signal, but there is still headroom to the upside. If we draw an extension of the move from Feb 11 to Feb 16, we coul
d reach as high as 9650. If we take out the high from yesterday and close nearer to 9650, watch for bearish divergence on the oscillators to signal a re-entry to go short.
We are still bullish short term, with a trend defining level of 9344 still intact. Once the trend line breaks, this horizontal 9344 will also be broken and could signal a decline towards 9265 and then further towards support at 9079. There are conflicting divergence signals on the chart and for this I am a bit confused. I guess you follow the trend supporting signal until the trend is broken. So the positive RSI divergence signal should take priority, considering the Stochastic signal is bullish as well. Targets to the upside could be the weekly R2 around 9652, but I am not personally bullish right now.
5 Minute Chart
We are currently oscillating around the daily pivot, not much to see here. At quick glance, the pivot levels look almost evenly spaced, so potential range trading opportunities may exist today. I would like to think that today marks the end of the bullish momentum and if we don’t see a trend break today, perhaps we see it Monday.
1 Minute Micro Chart
The Bollinger band is 34 and 3 and right now as I type this (although the chart screenshot below doesn’t show it), we are currently touching the upper band and the daily high at 9475. A half decent scalping opportunity.
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Dax Support & Resistance
|200 Day EMA||10350|