Technical Update - Correction likely to be unfolding in DAX/GER40 and EuroStoxx50/EU50 Technical Update - Correction likely to be unfolding in DAX/GER40 and EuroStoxx50/EU50 Technical Update - Correction likely to be unfolding in DAX/GER40 and EuroStoxx50/EU50

Technical Update - Correction likely to be unfolding in DAX/GER40 and EuroStoxx50/EU50

Equities 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  DAX/GER40 and EuroStoxx50/EU are indicating top and reversal scenario of 2-4%. Uptrend could resume after this likely minor correction


DAX/GER40 cfd Thursday 14the December buyers opened the Index much higher but couldn’t keep it up when sellers took control selling throughout the session forming a Bearish Engulfing candle (not the best textbook example though and could look like a Belt hold Marabozu which is also a top and reversal pattern) but with a close below minor support at 16,760 strong indications of a top and reversal was in place.

Monday morning buyers are trying to lift the Index back above 16,760 but are likely to be failing currently trading below the lower rising trendline.
A correction seems likely to be unfolding. A correction that potentially could take DAX down to the 03.82 retracement at round 16,096.

RSI has been in extreme overbought territory above 80 not seen in decades

Support around 16,528-16,469.

There is no divergence on RSI despite the extreme values indicating DAX could resume its uptrend after a minor correction.
If DAX is closing above 17,003 it will demolish the correction scenario and the uptrend is resuming with potential to 17,254.

Source all charts and data: Saxo Group

EuroStoxx50/EU50 cfd A couple of days with indecisive trading where buyers and sellers have been fighting it out the Index has formed a couple of Doji candles – open and closing price with in few cents of each other.
That could be a sign of a top and reversal. If we see a day with a bearish candle without the peak at 4,593 is taken out a correction is likely to be unfolding
The divergence on the RSI is indicating an exhaustion of the bullish trend adding to the top and reversal scenario being played out.

A close below minor support at 4,523 and below the lower rising trendline could fuel a sell-off down to around 4,384-4,363

A close above 4,593 and the uptrend will resume with a likely to 4,684

Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.