Hourly Chart - Dax Technical Analysis

Dax Technical Analysis 24-05-2017

Hello traders, let’s begin the Dax Technical Analysis 24-05-2017 by carrying on from yesterday. We were looking at three main things yesterday:

    • Developing head and shoulders pattern on the daily chart
    • Trend line being tested on the hourly
    • Symmetrical triangle on the 5 minute

Developing head & shoulders on the daily chart

This pattern is still developing, so long as we stay below 12705. I will check this again tomorrow. If this move plays out to a head and shoulders pattern, then I am looking for [3] to begin forming the right shoulder, with [4] forming part of the neckline. By all means, this pattern may not complete and actually break higher, because nothing is certain in trading. So risk management and reward to risk is the best way to capture the move.

The next target for me would be to take out the trend line on the hourly chart.

Daily Chart - Dax Technical Analysis 24/05/2017
Daily Chart – Dax Technical Analysis 24/05/2017

Trend line being tested on the hourly

This is the most compelling technical setup that I can see at the moment. Since forming this trend line, we have tested it three times this week. I appreciate that every other trader on the planet will be able to see this setup, it’s not disguised. But it does present a trading opportunity (see below) on a break below 12605. If we do break lower, and the move is not a fake break, I am watching 12500 for support. This could be a target. A stop loss would have to be above 12700, so the reward to risk is pretty much 1:1.

I am also going to keep an eye on the MACD here, to see if we cross the centre line.

Hourly Chart - Dax Technical Analysis
Hourly Chart – Dax Technical Analysis

Symmetrical triangle on the 5 minute

This triangle is not the strongest technical pattern to study because it often suggests that we are in a sideways market. In this example, there was not a lot to see. Price initially broke lower, perhaps encouraging sellers to jump on the move, but buyers took control and the move reversed quickly. So I will store this one and recall it for the next time it happens.

We briefly pierced the Bollinger Bands yesterday, before creating a double-top around lunchtime. Price did very little in the afternoon, retreating back to the daily pivot. I have noticed that the Bollinger Bands are beginning to pinch, so I will follow that up tomorrow.

m5 Chart - Dax Technical Analysis
m5 Chart – Dax Technical Analysis

Dax Trading Idea

Let’s consider the following, which I will follow up tomorrow:

SellLimit @ 12605
Take Profit @ 12505
Stop Loss @ 12705

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Technical Analysis Summary

  • SellLimit @ 12605 (H1)
  • Bollinger Bands are beginning to pinch (m5)
  • MACD about to cross center line (H1)

Dax Support & Resistance

KEY LEVELS
Open12596
High12703
Low12585
Close12666
Range118
Change0.56%
14 Day ATR121.28
200 Day EMA11543
Daily R212769
Daily R112718
Daily Pivot12652
Daily S112600
Daily S212534

Dax Technical Analysis 24-05-2017 written by Chris Bailey