Dax Technical Analysis 24/11/2016

Good morning traders!

Two pictures can pretty much summarise where we are right now

Dax is still range bound

As we have discussed for a week or two now, we have carved out two distinct zones here on the Dax. We are trapped in a fairly compact range and price has been respecting these levels which allows range traders a good oppportunity to buy at support and sell at resistance. Easy when you think about it.

Right now we are bang in the middle of that range, it’s a kind of ‘no man’s land’ as it offers traders no real reward:risk setup, or indication as to which way price is heading. So avoiding it is probably the best strategy.

03-h1-dax-chart
03-h1-dax-chart

Low Volume Pocket

I sent a signal out to the premium subscribers earlier today (well technically the algorithm did, but I will take responbility for it) to sell the Dax. Yes I know. The trade was stopped out and it left many traders wondering what on earth just happened to price. I believe the answer can be seen here on this chart.

Low volume pockets can often appear to repel price, and not always in just one clear direction either. Price often doesn’t like to trade in areas of low volume for very long and as a result you can see some fast moves as price cuts through the low volume pocket to draw nearer to a higher volume area.

Volume profile doesn’t really provide signals, it more just commentates on what is happening with price. It tells you things that candles on their own often can not.

04-m15-dax-chart-volume-profile
04-m15-dax-chart-volume-profile

I think there are better opportunities to trade other markets at the moment, particularly the US markets as the fundamental theme is still inflating the markets. I still wonder whether the rate hikes may pull the markets back down again, so question whether all this All Time High party is going to be short-lived. When the news stories start to report on the stock market records, and public interest starts to pick up, that’s also often another indication that it could be time to take profits and wait for reversal. Sounds slightly illogical I know, but it’s often how the markets react. When every man and his dog are buying the stock market, it’s time to get out.

Dax Support & Resistance

KEY LEVELS
Daily R210822
Daily R110751
Daily Pivot10676
Daily S110605
Daily S210530
200 Day EMA10354
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