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Dax hits support as bears drive price action Dax hits support as bears drive price action Dax hits support as bears drive price action

Dax hits support as bears drive price action

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Summary:  Bears remain in control of the Dax index, but a minor rebound appears likely. We still see strong support just above the 10,000 level.

Yesterday saw the German Dax index hit the support level at 10,800 that we have been talking about for the past couple of months. This was its first main target after confirming the shoulder-head-shoulder pattern in October. 

The trend is bearish with no Relative Strength Index divergence indicating that we are likely to see lower levels into the end of 2018 and going into January. 
We do, however, see strong support just above 10,000. 

For the index to reverse this medium- to longer-term bearish trend, a close above 11,690 is needed, but I do not really see that scenario unfolding any time soon. 
Dax (weekly)
Dax (weekly, source: Saxo Bank)
On the daily chart things look currently oversold and we see divergence on the RSI; expect a minor rebound. Closing the gap from yesterday morning (above 11,065) could fuel a resurgence towards 11,400-11,500. However, bears are in control and since the medium- and long-term pictures remain bearish, do not expect a long-lived rally. 

We see strong resistance at around 11,690.
Dax (daily)
Dax (daily, source: Saxo Bank)

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, or any of our other products work, and whether you can afford to take the high risk of losing your money. The value of your investments can go down as well as up. Losses can exceed deposits on some margin products. Professional clients can lose more than they deposit. All trading carries risk.

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