EQUITIES 2 minutes to read

Is the Dax ready to rebound?

Summary:  A rebound in the Dax (cash index) could take the market to around 11,586.


Despite no divergence on the relative Strength Index, we could see a short term rebound in the Dax over the next couple of days. In fact, it has already started.

Last 
Thursday saw the index form a bullish engulfing pattern followed by a candle with a large lower shadow, both indicating that selling pressure has lifted (see Figure 1).

The Lower Bollinger band is also contracting, indicating the bear trend is over... for now.

Looking at Figure Two we can see that GER30.I is currently testing the falling trendline and the gap from October 23. The gap should be closed within the next couple of days. In fact, if the gap is not closed in the next couple of days we are likely to see sellers regain control.

The rebound could take the Dax (cash index) to around the 0.382 retracement of the October sell-off, so around the 11,586 level.  

Enlarge
Source: Saxo Bank
Enlarge
Source: Saxo Bank

You can access both of our platforms from a single Saxo account.

Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)