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Technical Update - DAX & GER40

Equities 1 minute to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  DAX uptrend still stretched and ripe for a correction. Bearish break out of rising wedge has not yet initiated a sell-off. Key levels to look out for


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DAX
seems range bound between 15,620 and 15,250. Break out needed for direction.
DAX uptrend has looked quite stretched for weeks and is ripe for a correction forming a rising wedge like pattern with RSI showing divergence. DAX has broken bearish out of the wedge but the selling hasn’t kicked in.
However, the RSI divergence strongly indicates a correction and a close below 15,250 could trigger a sell-off down to 0.382 retracement at 14,945 and support at 14,906.
55 daily SMA will provide some support.
If DAX closes above last weeks peak at 15,569 the uptrend could be extended to 16K.

DAX d 14feb
Source all charts and data: Saxo Group

GER40 cfd levels: Support at around 15,267 which has been tested a couple of times. Support at 14,902.
A break above last week’s peak at 15,657 could extend upside to 16K

  

ger40 d 14feb

RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend

Author is holding a short position in GER40

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