Dax Technical Analysis 03/02/2015

Does this sound familiar: Dax reaches new all time high!

Well, here we are again folks, a new all time high and I am sure there is still further for this one to move.

Taking a glance at all the charts, we are still struggling to get to the 10900 level that I have been taking about for a while, but closing at an all time high on a Monday is significant because the week will generally follow the sentiment from a Monday. In my article eysterday I mentioned a strategy of range trading worked nicely through the day, but of course when you have a breakout, you lose some of the profit. Now the strategy needs to change, but I have no current open positions.

You could say that we are still trapped inside the larger 300 point range which has been building from last week or so, but there was a clear break out of the recently formed triangle pattern, pictured here, and so today I am watching a break above 10900 for a clear indication that bulls have once again taken control.

Part of me thinks that a good strategy at times like these would be to just continue to buy. Take now for example, buy from current levels, stop under 10500, buy another one every time it dips and just keep adding long after long, using previous lows as stops, targeting a longer term 12000. I really think we could get there (until the wheels fall off with Greece and other “bankrupt” nations start hacking away at investor confidence) within the next 3-6 months.

But the other part of me still wants to wait for a cheaper price to get in for those long trades, because I am weary of a correction past 10500, closer to 10200. I am in conflict and that inevitably means indecision and missing the opportunity to trade.

[wp_ad_camp_3]

Support & Resistance

KEY LEVELS		Difference
Daily R2	11027	150
Daily R1	10947	183
Daily Pivot	10798	96
Value High	10784	43
24hr VWAP	10752	35
34 Hour EMA	10751	46
Naked VPOC	10741	41
Daily S1	10718	129
Value Low	10696	20
Daily S2	10569	42
200 Day EMA	9629	15

Dax Daily Chart Analysis

RSI is around 68.5 so still has some room to manoeuvre to the upside, but you can see we are still hugging the underside of the top trendline from the bullish channel and we have already taken out the weekly R1. The weekly R2 stands at 10987. The overall bias is bullish.

Dax Intra-day Chart Analysis

[wp_ad_camp_1]

We have broken out of the range I suggested yesterday after a late surge in the final couple of hours of trading last night. The first few hours today will be interesting to see whether we get rejected back down to 107xx or whether we can build a temporary floor of support at 10800, which is where the daily pivot resides. A break of the daily pivot will cause me to sit out and wait for a long position somewhere in between S1 and S2. A hold above 10800 will tempt me into a long position from around 10800-10825.

Volume Profile Chart Analysis

We are currently 10866 and that is a long way above yesterday’s value area, in fact the value area high is much lower down at 10784 but I would suspect that, given the current volatility, we can reach this if we break the 10835 cluster and subsequent 10800 cluster. 10784 may provide a decent entry to go long if patience is wearing thin.

There are a couple of lower volume pockets, but mainly because of the trading activity occurring in the evening, however I would not be surprised to see a quick fall to 10830 and a break under 10820 opens up 10805 quite quickly too.

We closed well outside the deviation high, which would act sometimes like a bollinger band, so mean reversion could pull price back down towards vwap.

[wp_ad_camp_1]

 

[wp_ad_camp_1]

 

[wp_ad_camp_1]

 

[wp_ad_camp_1]

 

[wp_ad_camp_1]