DAX Index Bulls Lose Control in a Weak Moment

DAX 30 traders are less confident today as they in the morning sent the DAX index to levels not seen since Monday last week.

The move lower was not enough to end the short-term uptrend, but if the index tomorrow slides below today’s low of 13139, then it might mark the start of a few days correction. The next support level per the “Andrew’s Pitchfork” seen in the chart below is the second trendline from the top currently around the 12912 level. A decline to this level would also be a correction to the levels seen at the start of the month, and this spot might offer some support before I anticipate the DAX index to retest its current yearly high.

However, if the price trades below the October 31 low of 12800, we might see a steeper correction taking the DAX index to the median-line, currently at 12450.

The next resistance level is this week’s high of 13318, followed by the upper trend line at 13400. The fact that the index is so close to the upper trendline is an indication the index is overbought. The index turned lower from this trendline in May and July. The index is also overbought per the RSI-14 on the daily chart, and the index is now slipping below the 70-threshold, indicating that the momentum of the DAX 30 might be about to change.

 

DAX 30 Chart

 

By Alejandro Zambrano, Editor In Chief at Investingcube.com, and Chief Market Strategist at ATFX.

 

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