This is the Dax Weekly Chart. Tuesdays Hanging man on the daily followed by Wednesdays upside rejection had put us on guard for a slide back to take a look at the recently breached 38.2 Fibonacci Retracement at 6968. This is still the case but the Bulls are not ready to let this happen without a fight. Yesterday was quite a small range but we closed the day on a positive note. Even if we did slip back, as long as we don't spend too long below 6968 and also do not make a print below 6895 then the Bulls will still be in the driving seat. Their objective is to push for the gap at 7342.5 from January the 18th of this year.
Indicators in Play
A Hanging man is formed with a small real body at or near the top of the days range and the lower shadow, or wick, should be two or three times the size of the body. This shows some vulnerability but needs confirmation by the opening and preferably closing below the Hanging Mans Body.
Summary
The Bulls are holding in there even though there is some evidence that a pullback could be on the cards. Even so, we would only begin siding with the Bears on a breach of 6895 and there is a strong argument to buy dips to here with a tight stop.
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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