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Technical Analysis – DAX 30 loses momentum

DAX30 18/06/18 | EconAlerts


DAX 30 (German 30) stock index loses momentum after creating a double top.

The Germany 30 stock index has plunged today after the significant bounce on the double top level near the 13200 level. The sharp sell-off has driven the price towards the 50- and 200-simple moving average (SMA) in the medium-term, which are expected to post a bullish crossover in the next few sessions if the price recoups the losses.

Looking at the daily timeframe, the RSI indicator holds near the 50 level and is sloping down; some caution may be warranted given that the indicator is trying to enter the negative territory. Moreover, the stochastic oscillator posted a downward crossover – the %K line moved below the %D.

As the price is developing below the 23.6% Fibonacci the next level to have in mind is the 38.2% Fibonacci retracement level of the up-leg from 11710 to 13200, around 12627.26. It is worth mentioning that the price would first need to drop below the 50 and 200 SMAs. If there is a break below this level, it would challenge the 12550 support. However, there is also the chance of a pullback at moving averages that could lead to some gains.

In case of an upward attempt, the index should see the 13200 resistance level, taken from the peak on May 22. If there is an upside break, the index would likely meet resistance at 13600, this being its all-time high.

In the medium term, the neutral outlook remains intact, as the index failed to endorse the previous bullish structure over the last five weeks.

DAX30 18/06/18 | EconAlerts

 

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


source: XM

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