Dax Technical Analysis 27/05/2016

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Good morning traders!

Before we look at the Dax Technical Analysis, the biggest news story seems to be about Oil breaking the $50 mark for the first time this year, providing a boost to European markets yesterday. The market is still digesting the rally we saw on Wednesday but we certainly continued the bullish momentum yesterday by posting the third consecutive bullish candle of the week.

Dax Technical Analysis

Price is now comfortably sitting back inside the bullish trend channel on the daily chart which was broken last week, the break out last week threatened to take out the 9750 support, but instead we have bounced aggressively, with some strong momentum and now sit, once again, above the daily 200 EMA. We are above the 10100 range resistance and remain in a longer term technical uptrend. The next move for this trend to continue, is a break of the 10400 high posted in April.

We have rallied sharply this week, gaining over 400 points and many oscillators (on the higher time frames) are showing the market to be stretched. In these situations it’s possibly to find shorting opportunities, but it’s often more profitable to wait for opportunities to buy again, assuming that this trend continues.

If we get a pullback, then Friday is generally a good day to find it. Targets for a pullback would be 10150, beyond that 10100. So perhaps somewhere in that zone. If price continues to rally, then 10330 is a common target and beyond that we have the April high to test.

There is a possible opportunity to trade a break out of the 5 minute triangle when the market opens. If we break down, then the first support level would likely be the daily pivot (pivot point indicator) at 10243, beyond that 10215 was a rejection zone yesterday and beyond that we have the daily S1. If we break higher, then 10290 will need to be taken out and kissed goodbye.