Dax Technical Analysis 25/04/2017

Good morning traders!

We gained over 3% on the German Dax yesterday with a candle that ranged over 400 points reaching an ALL TIME HIGH (finally) and aggressively ending the recent monthly downtrend. Today is a lot more subdued, as you might expect, but has yet to really begin a retracement. We have broken back inside the Bollinger bands on the 5-minute chart, but we are still above the daily pivot, trading around 12450.

We are clearly overbought, we are trading around 2 standard deviations higher than the 200 period EMA right now, price tends to respect that level, so buying from here is perhaps -EV. It’s difficult to predict a reversal point because we have no overhead resistance (historically) apart from yesterday’s all-time high, but it would seem logical that price will reach 12400 at some point.

The technical trend for this market is clearly bullish as the bearish trend of late has been wiped out. We are bullish above 11950. Buying zones (based on a retracement from the recent swing) are between 12165 – 12285 with my preferred zone of 12185-12200 (based on the market profile) looking interesting.

I have been testing a new Algorithm recently based on my Bollinger band and RSI divergence strategy, and yesterday it opened a large swing trade sell. I have not passed this on as a signal, because it’s still being tested. But it does look a slightly better proposition (in terms of reward: risk ratio) than going long from current levels.

My personal view is that we trade sideways a little, digesting the gains from yesterday before testing the highs again. I want to see a bigger sell signal before I change bias.

Dax Support & Resistance

14 Day ATR135.37
Daily R212743
Daily R112603
Daily Pivot12339
Daily S112199
Daily S211935
200 Day EMA11301

Dax Charts

03 H1 Dax Chart
03 H1 Dax Chart
05 Dax m5 Chart
05 Dax m5 Chart