Technical Update - DAX and GER40 rejected at key resistance. Bear trend could resume
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
DAX and GER40 rejected at key strong resistance level. GER40 even had twice attempts failing. Selling pressure and down trend could resume. DAX support at 12,673 is key
DAX was rejected yesterday at key resistance at around 12,927 and the 0.618 retracement of the September sell-off. 55 SMA also provides resistance. RSI was rejected at 60 threshold i.e., RSI is still showing negative sentiment. If RSI closes below its falling trendline it is an indication of bear trend to resume.
If DAX closes below 12,673 selling pressure is likely to accelerate with support at 12,358 but lower levels should be expected.
For DAX to change this bearish looking picture a close above Tuesday high at 12,932 is a must. .
The GER40 cfd/DAX future was rejected yesterday at the key resistance at around 12,939. IT has another go this morning but is being rejected. If GER40 fails to close above 12,939 – it just spiked above this morning but failed to keep momentum - and slides back below 12,702 bear trend is likely to resume. GER40 must close above 12,939 and RSI must close above 60 to keep upside momentum for a move to test the upper falling (black) trendline.
However, at the time of writing the likely outcome seem to be GER40 resume downtrend. RSI is being rejected at 60 and if it closes below its rising trendline it is an indication of bear trend to resume.
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