DAX struggles early once more as near term range builds

DAX Xetra (cash index)

Price action on the DAX is increasingly mixed as a variety of candles over the past week have reflected what is now a conflicted outlook.

This comes as there is increased consideration of how to play this market within the medium term outlook.

The downtrend of the last three and a half months comes in at 12,465 and it is interesting that the last week has been capped just below the downtrend at 12,458.

However, once more this morning the market has opened lower and questions the ability of the bulls to push forward at the downtrend resistance.

A two week uptrend which was breached by yesterday’s early session drop to 12,272 can be realigned but is already being tested by today’s early weakness and comes in at 12,310 now.

Concern remains that the consolidation is to the detriment of momentum with the RSI again rolling over around 60 (where the previous rallies have failed within the medium term downtrend).

This would suggest that if this redrawn near term uptrend is again breached, the rally would be gradually wilting and at risk of a renewed correction.

  • Support at 12,272 is now added importance to this, especially if there were to be a close below.

The hourly chart shows momentum is struggling to sustain upside momentum now as the Stochastics cross lower and the MACD lies fail for traction.

  • Initial resistance is with today’s traded high at 12,394 but the pressure is mounting once again.