The DAX is currently trapped between the two trend defining levels of 13,096 and 13,305. Inside of these two levels we have a fairly strong range. Yesterday that range support was strengthened with another test of 125. We also tested range resistance around 250 as well.
Prior to being in this range, the DAX was bullish. I remain bullish overall and I actually took along this morning around about 7:30, which was sent out into the channel as a Dax signal. As I write this article I noticed that we are testing range resistance. This is great for the trade, but we may struggle to reach the target because it is beyond the resistance level. If you want to find out more about DAX trading signals, please visit the website.
The developing a monthly composite point of control is currently around 204. I noticed the price section is currently oscillating around that level inside this range. I also repeat what I mentioned yesterday (https://thedaxtrader.co.uk/dax-technical-analysis-18-11-2019-and-how-to-get-a-vwap-chart/) about the profile. I talked about how we are skewed at the moment. The majority of the volume skew towards top of the profile. If the market breaks higher it can balance up the profile into something more normal looking. I would welcome this.
DAX Analysis Video
Why not come and join us at 8am (UK Time) for the morning webinar. Get involved. Find out more https://www.twitch.tv/thedaxtrader
How to Identify RSI Divergence
I talked this morning in the webinar about RSI divergence. This is a DAX analysis tool that I used to use very often. There are two types of RSI divergence; you have regular divergence and you have hidden divergence. For now, just pay attention to regular divergence.
For regular bullish divergence (this is a buy signal) you need to see a lower low on price and a higher low on the oscillator.
For regular bearish divergence (this is a sell signal) you need to see a higher high on price and a lower high on the oscillator. This technical analysis tool is very useful when a market is trading in a range.
If you go and measure yesterdays range, noticed that the 50% point is where the point of control was from the previous day. I commented yesterday that price would likely test the high and the logo of Friday and find balance somewhere in the middle. And this is exactly what we saw yesterday which is great to see. The market closed inside the value area of Friday just on the point of control. And now this morning we have tagged yesterdays high, already, but failed to find momentum just yet.
DAX Key Levels
|Point of Control||13220|
|Value Area High||13252|
|Value Area Low||13158|