28-05-2019 Dax Technical Analysis

28-05-2019 Dax Technical Analysis

Morning traders. We can see a compression pattern forming on the daily chart. These patterns generally tend to build pressure, much like when pressing down on a spring. It’s similar to what we learnt at school in physics. You remember, right? When you press down on a spring you have a buildup of potential energy. So when you let go of the spring, the potential energy turns into kinetic energy and the spring shoots away. Much the same behaviour can be observed on the financial markets as well. This is quite a small example, I will not put a huge amount of weight behind this observation, it is one.

DAX Hourly Chart

The hourly chart shows 24. The first is a downsloping a large fork and prices currently trading in the upper quartile. The most recent bounce from the median line is interesting. Drawing a trend line connecting the lows of this bounce shows that price has found a new series of higher highs and higher lows. And if we go back to the previous bounce from the median line we can use that as our A point for a second fork. Continue to watch for a break of the second fork’s lower medium line parallel. So now the trend remains bearish.

DAX Price Action

Yesterday’s price action remained above the previous days point of control for the majority of the session. We could see a break above the value area high in the early part of the European morning session and then a break through the previous day’s high. Overall the distribution of price was quite normal and today we can see from yesterday down around 12,061. Today we have already tested the high from yesterday but failed to break above it.

DAX Trading Update

I have not needed to trade very much tax over the last couple of weeks because the majority of my games have come from forex and crypto. My opinion is that if gains can be made in alternative markets because the conditions are better then it is worth spending some time taking profits from there. The Dax will always be available to trade. However, if conditions are not right for my strategy then it is best for me to wait.