We have chosen the German Government Bund for today’s chart of the day. In the middle of March we saw a pattern that just about qualifies as a Dumpling Top. We also saw a Spinning Top at the peak of this move and it wasn’t long before the sell off began aided by a gap lower. The 28th of March saw a massive spike down followed by a spectacular recovery. This didn’t last long though and we are once again sitting just above Trend Support at 114.73, which coincides, with our Channel on the Monthly chart.
Indicators in Play
In Japanese Candlesticks, a Dumpling Top is where we have seen a rounding off of prices after a decent rally. The pattern is confirmed when we gap lower.
We have shown a Monthly chart that shows we are at important levels. The channel we have drawn is not pure as we have dipped below the support line a couple of times.
Summary
The Bund continues to look worrying to us at the moment. However, it is dangerous to start shorting here when we have already done quite a bit to the downside and we are still above 114.73. If we did test this level again and fail to react we can assume there is more downside to come.
David has been
analyzing and trading the worlds financial markets for the past 25 years. After an initial grounding with Mercury Asset Management and Warburg Securities he went on to set up his own brokerage operation in London. Since then he has appeared regularly on Bloomberg Television and been involved in providing analytics on behalf of some of the worlds major exchanges. He is also a member of the Society of Technical Analysts.
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