Dax Technical Analysis 02/09/2016

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Good morning traders!

We had a bit of a spinning top day yesterday, attempting to break out of the range at both ends, but ultimately failing to do so and ending up back where we started again. So it’s difficult to say how much longer this this sideways action will continue.

Yesterday eventually sliced straight through the daily pivot after threatening to break out above the range to the upside, we took out the daily R1, but not for long as the late morning/early afternoon slump began and around 3 o’clock collapsed through the daily pivot before settling on the daily S2 (pivot point indicator). This level provided a good bounce and I am sure a few traders had a go at that after seeing it hold. I also noticed yesterday that the weekly pivot held price around 10523 (on the 30 minute chart) so I am looking for this to hold again, after the second test this morning.

I don’t think many will argue that price looks pretty heavy at the moment and is drawn to the bottom of the range, so a bullish bias is looking a little vulnerable at the moment, but in a range it’s often a profitable strategy to accumulate a position at the bottom of the range. If we do break below the daily low and below 10500 again, we could open up the door for a test of 10400 and this would be my line in the sand, i’d struggle to remain bearish if we broke below that.

I have a renko algorithm running on one of my personal accounts at the moment, running a simple 10 brick strategy which is being chopped up a little, because of the lack of trend. My RSI algorithm is bullish and has opened three long positions today, which I have reduced to one.