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Dax hits support as bears drive price action
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.
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.
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.
We see strong resistance at around 11,690.