Since our Hammer posted on the 17th of March the Dax future has seen a reasonable recovery including a gap higher just around rollover. Unfortunately from the 2nd to the 8th of April we witnessed a number of High Wave Candles, which was the warning that things were not all rosy just yet. Yesterday was a fairly quiet session, a relief for the Bulls, after Fridays poor performance. We have lots of data out over the next few days both from the Euro zone and the US so we expect to be testing either Trend Resistance at 6795 or Gap Support at 6475 before the end of the week.
Indicators in Play
Trend Resistance Lines are probably the most basic and easy to understand tools in Technical Analysis. Its just a matter of joining lower highs together with two and some prefer three points of contact.
Gaps occur when the market opens cleanly above or below the previous days range. In this case the high of the previous day to this gap on the 25th of March acts as support.
Summary
Long term we are just about holding on to a bullish stance but cannot afford to close below 6485 again. Short to medium term it’s a case of which level holds between the gap support at 6475 and trend resistance at 6795. The picture should be clear once this week’s data is released.
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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