Technical Research Note: DAX Index
DAX Index – Daily Chart
The index has remained range-bound for the past 5 weeks, finding support at 10245 and resistance in the range of 10862 to 11000. The price has shifted outside of the short term upward channel (from the 16-19 March lows) whilst losing both the 8 and 21-day exponential moving averages and simultaneously triggering a bear flag pattern. Whilst the shift outside of the channel suggests a bearish rollover, traders should keep in mind the potential for a re-test/back-test of the breakout level, which in some cases are often sharp. Here’s a scenario you want to consider: what if we close the first downside ‘gap’ at 10097, then make a bullish reversal in enact the aforementioned channel breakdown and backtest. I’ve denoted the potential price action on the chart.
Trading Desk Analyst
Unum Capital (Pty) Ltd
An Authorised Financial Services Provider (FSP 564)