Today we are going to be analysing the DAX.
For those who don’t know, the DAX is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.
I have included 2 charts today to show you a very interesting graphic representation of a possible repeat of a cyclical event.
As you can see in the first chart below, almost exactly this time last year the price reached a high level of 12,400 then gradually declined below the 10,000 levels. Again this year, the price has reached those levels and has already started its decline. Could this possibly be a sign of another drop in price?
Focusing more on current time frames, the price is nestled between 2 major support and resistance areas. We are still above the 200 Day Moving Average, signalling a possible continuation of the uptrend. The doji candle posted yesterday shows indecision in the market and today’s strong bullish candle almost confirms a continuation of a further upward movement. A break above the minor resistance area at 12,076 will likely see the price testing the major resistance area and all time high point at 12,400. A break above that will take us into unknown, all-time high territory and will probably test the 13,000 area.
Failure to break the minor resistance area at 12,076 might take the price back down to the first minor support 11,800 and then 11,500 in extension.
All technical indicators and moving averages are showing long term bullish signals, but lets see if history is going to repeat itself….
*All information in this article is the author’s opinion and is for educational purposes only. It does not constitute investment advice or a solicitation to buy or sell any financial instrument. Trading may expose you to risk of loss greater than your deposits and is only suitable for experienced investors who have sufficient financial means to bear such risk.