Dax Technical Analysis 17/11/2016

Good morning traders!

Yesterday we had a bearish engulfing candle on the daily chart after failing, once more, to take out 10800. We have attempted quite a few times to take out this level but have struggled to do so. Price pierced the low volume area below 10650 and suggests that profit taking is contributing to a pull back. Many traders are targeting a pullback to 10500, finding the entry is proving challenging as price continues to act unpredictably.

Correct me if I am wrong, but November/December typically tends to be a good period for equities, so I would like to be looking for spots to buy. If we can get to those levels (10500), barring some sort of crisis, I would be tempted to take up a position.

On the H4 chart the pullback looks like a more obvious play, almost text book. Price seems to have stalled at resistance, the 50% retracement zone is an often visited retracement zone and the oscillator has broken back into normal levels after remaining overbought. So the targets according to this timeframe would be somewhere between 10500-10570.

I haven’t updated my volume profile chart to show you when I am about to describe, but we have broken through a high volume node recently and are currently trading in a low volume zone, we have just (as I am typing this) rallied higher to test that high volume node from the underside and have been pushed back down. This provided a nice entry to go short, around the 10660. If we ignore the volume profile for now, we know that this level was strong support over the last few days, certainly from an intra-day perspective, price often bounced from here. But breaking through that and seeing it now currently act as resistance, is a great technical pattern.

I am interested in the 30 minute candle between 8:30-9:00 as it was appearing to be a hanging man, which is a nice bearish candle, but it’s a bit unsure of itself right now. Either way, I am bearish below 10700, I am looking for selling opportunities and targeting 10575 and 10510.