Dax Technical Analysis 23/03/2015

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Good morning traders!

Early trading is pointing to the downside today after a quick sell off and we are already down by around 1% so Bears are firmly in control today and I am waiting to open a long position as I still believe there is plenty more room to move to the upside. We may trade even lower than current levels of 11900 and if so, we may target 11850 or even 11800. I am slightly concerned that we have two pretty strongly bearish 30 minute candles before 10am on a Monday, because the weekly momentum can be set by Monday trading. So whilst a couple of negative days will be fine, a strongly bearish week could open up the argument of a much deeper correction. I would be surprised if we trade below 11574 this week and I am trading on the expectation that we will be higher than current levels by Friday. But if we do break that level, I might be sat out for a while.

Overall, despite the early concern, I am still Bullish because I believe that market will continue to move higher, perhaps a lot slower than in recent weeks, and also perhaps with a lot of sideways movement in between, but overall the macros suggest room to climb. The Fed had their influence on US equities last week which does spill over into European equities and if volatility continues to decrease then only a major shock should reverse the bullish movement. You might say there is flow from German equities to US equities based on the Fed last output last week, perhaps one of the reasons for the sell off today.

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Dax Support & Resistance Levels

KEY LEVELSDifference
Daily R21220191
Daily R112122121
Value High12085155
Naked VPOC12042136
Daily Pivot12008116
24hr VWAP1200895
Value Low11991134
34 Hour EMA1197644
Daily S111929146
Daily S211815141
200 Day EMA1013318

Dax FXI Predictor Analysis

We have fallen through the bottom of the 30 minute channel lines suggesting that we can buy as the overall trend is bullish. I am going to look to go long at 11850

Dax - FXI Indicator
Dax – FXI Indicator
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Dax Daily Chart Analysis

We are currently between the 100% extension from the January/February swing and the 61.8% extension. I would welcome a pullback to 11574 with a rally through the 12180 before summer. If we get sideways movement then we could stay somewhere inside the box for a few days.

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

We could pullback even lower into the box and challenge the lows from last week and the daily S2. I will be adding to my longs from here and if we stay above 11775 then we can move higher. Bears are awake today, so bulls might just sit back and wait to trap them.

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

We broke a little bearish channel last week on our way back towards the bullish regression channel. Could we fall down to test the top of the bearish channel, which is around the weekly S1.

Dax Intra-day Chart (30 minute)
Dax Intra-day Chart (30 minute)
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Dax Volume Profile Chart Analysis

We have sliced through the value area range of Friday fairly quickly today, found a bit of support at Thursday’s VPOC but have since moved lower and held just above the value area low of Thursday (2dVAL). There was a gap open higher on Friday in between 2dVAH and 2dVPOC which has now been closed. We are trading comfortably below the current VWAP with a bearish signal so I will watch the reaction to the 11950 level as this was around the end of the fast decline this morning and then I will be watching  the approach to VWAP, to see if we bounce lower or can get back above it.

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