27-02-2018 Dax Technical Analysis

The News

Good morning traders. A quick look through the news, the UK now has some snow too and storm Emma is on the way to hit around Thursday. We don’t always tend to cope very well with snow, compared to our European neighbours. I never actually seem to see the snow being in Dorset (on the south coast), so I only see it in other people’s pictures.

Back to Germany. Peter Feldmann, the current mayor of Frankfurt (home of our favourite stock exchange) misses out on outright election and now probably needs to go to the next round. Merkel’s CDU voted in favour of a coalition with the SDP, however the SPD still need to approve the plan. That’s likely to happen on Sunday. Gold prices rally from their recent dip ahead of the US inflation data. Let’s see what the new Fed Chief has to say. But super Mario says that Eurozone inflation is still dependent on quantitative easing! He suggested it could be extended, again. BTD! QE is still being heavily defended by the central bank. Crazy world. Buy cryptocurrency?

Economic Calendar – Upcoming Today

27-02-2018 Economic Calendar

27-02-2018 Dax Outlook

The trend for the DAX is quite clearly bullish in the short term. We are making higher highs and higher lows.

In order for this trend to continue, the price needs to take out the previous high (approx. 12600) to confirm that the 1248x level is the new higher low. The current mini-trend defining level is the previous minor swing low, which is around 12450. So aggressive traders will be looking for buying signals above 12450 and expect for the trend to continue.

If we fail to take out that 12600 high, then it’s possible we are going to test, or break that 12450 trend defining level. So mark them out on the charts.

27-02-2018 Dax Trend and Forecast

Taking a look at a wider view (below), the picture is still Bullish for the Dax.

The pitchfork here is drawn from three major pivots and the parallels are containing price for now. Notice how price is still responding to the median line (inside the shaded zone). Notice also how the low from yesterday formed around previous high volume node on the composite volume profile (on the right). This acted as a support level so a retest, or bait, of that level today could be interesting.

Dax Reacts at 480

Here’s another look at an old strategy that I used to use. The Bollinger Band vs RSI Divergence strategy.

Pull up a 1m chart, draw a 600, 2 Bollinger Band, and a 14 period RSI, look for RSI divergence when price is either above or below the bands. It can offer good mean reversion entries. Yesterday, there were two such entries, one from both sides.