Technical Update - DAX & GER40 forming top and reversal patterns Technical Update - DAX & GER40 forming top and reversal patterns Technical Update - DAX & GER40 forming top and reversal patterns

Technical Update - DAX & GER40 forming top and reversal patterns

Equity 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

DAX and GER40 have formed Top and Reversal patterns and seem ripe for a correction. Still upside potential though



DAX has formed an Evening Doji top and reversal pattern on Daily chart. It is not textbook perfect (as that would have required the Shooting star like candle to be a long positive one) but nevertheless an indication of top and reversal in DAX.
There is risk to further upside it should be noted, with RSI not showing divergence despite being in overbought territory and if DAX closes above to peak of the reversal pattern i.e., above the Doji peak at 13,441 the reversal pattern has been demolished and DAX could move to 13,709 possibly 13,902 resistance.
However, with this top and reversal pattern a correction should be expected likely down to the 0.382 retracement at 13,439. There is support at 13,564 and the 200 daily SMA also offers some support.  If RSI closes below its lower rising trendline it would be a strong indication of the correction scenario to unfold.
Source: Saxo Group

The GER40 cfd/DAX future has formed three Doji’s in a row i.e., indecisive market. If GER40 forms a negative candle today with a close below 14,122 this formation should be considered a top and reversal pattern. A reversal that can take GER40 down to 13,570-13,435.
If GER40 closes above 14,442 the reversal pattern is demolished and GER40 is likely to move to 14,710 is needed. With RSI not showing divergence this is greater upside risk than if there was RSI divergence.

Source: Saxo Group
Disclaimer

The Saxo Bank 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 Bank 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 Bank 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 Bank 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 Bank 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 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. 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/legal/disclaimer/saxo-disclaimer)
- Full disclaimer (https://www.home.saxo/en-mena/legal/disclaimer/saxo-disclaimer)


Boulevard Plaza, Tower 1, 30th floor, office 3002
Downtown, P.O. Box 33641 Dubai, UAE

Contact Saxo

Select region

UAE
UAE

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

Saxo Bank A/S is licensed by the Danish Financial Supervisory Authority and operates in the UAE under a representative office license issued by the Central bank of the UAE.

The content and material made available on this website and the linked sites are provided by Saxo Bank A/S. It is the sole responsibility of the recipient to ascertain the terms of and comply with any local laws or regulation to which they are subject.

The UAE Representative Office of Saxo Bank A/S markets the Saxo Bank A/S trading platform and the products offered by Saxo Bank A/S.