Dax Technical Analysis 28/05/2015

Hello traders!

After ironing out a small internet access problem, I can now publish the article.

Overall we are bullish above the 11150 that we have discussed for a while, the trend is still bullish and we had a decent day yesterday. Now we have slowed down and the market is deciding the next move. I went long from 11638 yesterday thinking this was the low and we would continue to move much higher from here. I think the fundamentals support a move higher but I would be surprised to see this swing back down to 11600 or 11500 and being trapped in a range even down as low as 11400.

Other European stock markets are supporting the bullish sentiment and there are some opportunities in the other markets, particularly the French to test the yearly highs once again. You might believe that Dax can have another run to the yearly highs, but there seems to be more resistance to break through.

I am not buying from current levels because I want to see a break and hold above 11950. This suggests a breakout above the .618 fib retracement from the recent 10% correction swing down. We have tested this region a few days back and experienced a sharp rejection, so I am interested to see the reaction the next time it is tested. I am going to buy from 11400-11600. Let’s not forget that the Dax is still stretched after gains of over 40% since October, so a period of prolonged sideways movement would not be unusual.

Watch out for possible bear flag developing. Watch out for a break below 11150 and watch out for a break above 11950. In between, I am watching for buying opportunities from lower levels.

Dax Chart

I thought i’d use the 30 minute chart today showing the recent correction trend, the weekly pivot point levels, a fib extension of the first leg down from the mid April correction and the fib retracement of overall swing. We’ve settled on the weekly pivot right now at current levels, we have failed to break above the .618 fib retracement. Recently we bounced from the .618 extension at 11614 and this is an interesting area to watch. If we break it then I will watch the weekly S1.

Dax 30-minute Chart
Dax 30-minute Chart

I took a long on the Dax yesterday based on my Tweet and closed out half the position for around 110 points. I will hold the rest and see where it goes. I may be closing the Bund position soon, I think it’s a lemon at the moment.

Open Positions
Open Positions