Dax Technical Analysis 24/04/2017

Good morning traders!

Well, there you have it! Nothing more to say other than, we’ve made an all time high on the Dax! My bullish bias was not incorrect and now we’ve finally closed some of the disparity between the US and other European indices and the Dax. The downside is, it now makes the index look incredibly overvalued and difficult to find spots to buy, so for a bull like me, it’s a waiting game. Which is really boring. Would I buy from here? Maybe, but unlikely.

It’s almost pointless analysing the data from Friday, because thanks to the ongoing and developing French election saga, the moves have already happened. I believe many short traders have had their pants pulled down here, not because of bad decisions or bad analysis (because technically it was beginning to look bearish), but because of the political shift. There are plenty of column inches devoted to the story, so you can research that yourself, but my prediction remains that Macron will win it. I think it would be a disaster for the EU project if Le Pen gets it.

So right now, the Dax is at an all time high, it looks like it wants to reach 12500, but right now it’s already gained nearly 400 points on the day, 3-4 times the average daily range of the market, it’s above all major technical pivot levels, into uncharted territory, it’s really anyone’s guess as to what happens up here, but the sheer aggression of the move states that we may see some higher levels, squeezing the shorts out, before it pulls back.

If you are not already long, keep your powder dry for the moment, because the worst thing to do right now is say “but the market is moving, let’s ride it”, jump in, find out that the move is exhausted, then be caught on the wrong side of a trade and sit on drawdown for weeks of volatility during the election campaign. It’s a fools game to chase it. Wait for the market to move back to the buy zone and be patient, otherwise, you’re gambling and the majority of gamblers don’t last in this game.

Is there a chance to short? Possibly yes, but it’s clearly a counter trend move, therefore it’s easy to get stopped out as the bullish momentum continues, so it will probably take a few attempts. But in my opinion, patience will win.

Dax Support & Resistance

14 Day ATR140.6
Daily R212142
Daily R112109
Daily Pivot12058
Daily S112025
Daily S211974
200 Day EMA11289

Dax Charts

01 Dax Daily Chart
01 Dax Daily Chart
03 H1 Dax Chart
03 H1 Dax Chart
05 Dax m5 Chart
05 Dax m5 Chart