DAX Report – Intraday Levels – 22nd April

 

Saudi Arabia have ended their month-long military campaign in Yemen, stopping airstrikes which will help dampen tensions in the Middle East and anxious sentiment in the markets.  In Europe, an executive board member of the ECB, Benoit Coeure, has commented in Greek newspaper Kathimerini today.  In his interview, he states that Greece will continue to receive liquidity assistance on the proviso Greek Banks have enough capital requirements – see full article here.

 

After those comments from Mr. Coeure, it wouldn’t surprise me for Greek Prime Minister Alexis Tsipras to include some form of controls on deposit holders to stop capital outflows from Greek Banks as part of its proposal to the EU/IMF in the coming weeks to release more funds.

 

Looking at an Hourly chart of the DAX below, one can see that in yesterday’s trading session bulls and bears were at somewhat of a stalemate with price moving up and down in a whipsaw fashion trying to eek out a trend bias.  The 11931 was a key level from the weeks before (red dash line in chart below) and the 11927 was the 38.2% retracement level from the highs two weeks ago (12407) to the low on Friday (11632). Price seemed to gravitate towards this area yesterday, with bears finally piercing it this morning.  The 100 moving average (blue line in the chart below) intersects nearby at 11918.  Can price stay below this level in trading today?

 

 

(click to enlarge)

 

CONCLUSION – NEUTRAL

The 11858/11842 zone on the DAX will be the line in the sand for the bulls today.  This area also comes in around the 50% retracement of the move up from last Friday’s lows of 11632 – yesterday’s high of 12079 – this level being 11855.

However, for bears wishing to short the DAX below that area…..do so with caution.  Remember, with tensions easing in the Middle East, this should help boost U.S. sentiment when markets open there at 14:30 GMT.  Also, the ECB is still continuing its €60 Bn a month bond buying program with the long term trend still up and the Greek EU/IMF funding crisis is ongoing with no full drawn conclusions.

What does all this mean?  It means long term bulls will be looking for value opportunities, 11840 zone, 11775/11750, 11606/11595…and so on.  Think about where the strong buy zones will be, these will be targets for bears.  Then think about shorting areas with defined risk.  If the risk:reward do not suit your trading parameters, then you should sit on your hands.  Remember, being in cash on the sidelines is still a trade.

For bulls, buying opportunities with defined risk lay against the Hourly 100 MA on a move above, on a break above today’s high of 12042 and the 11860/11840 zone.

For bears, shorting opportunities reside against the high of 12042, the 11931/11927 area, the underside of the Hourly 100 MA, a break of 11846.

 

Bearish targets:-

• 11846  (Key low that formed a base on Monday)
• 11800
• 11776  (Top end of 11775/11750 zone & close to Daily S2 Pivot of 11754)

Bullish targets :-

• 11971    (Daily Pivot Point)
• 12042  (Daily High)
• 12079   (Yesterday’s high & also Daily R1 Pivot)