***PLEASE NOTE THE GLOSSARY SECTION HAS FINALLY BEEN UPDATED – THANK YOU FOR YOUR PATIENCE***
Doom and gloom continues to reverberate and take hold of global equity markets in trading today, as China’s Shanghai Composite fell 8.5%, Hong Kong’s Hang Seng Index dropped 5.2% along with Japan’s Nikkei dropping 4.1%. Already coined ‘Black Monday’, the panic sell-off in Asian stocks also affected commodity prices with Copper, seen as a barometer of global industrial demand, falling 2.5%, Oil hit 6 & 1/2 year lows down another 3% – see article here
The contagion spread when European bourses opened for trading today. The DAX fell another 3.5%, which brings the month-to-date sell off at just over 17% for the DAX – quite the correction in price. No doubt long-term Bulls will be looking to get long at various price points as some dollar cost average. One price point of note over the coming days/weeks is 9378. This is the low for the year dating back to January 6th. If price continues below that we have the December low from 2014 at 9215, November low at 9125 and finally the year low at 8350 posted on October 16th 2014.
Looking at the 5 minute chart of the DAX below, one can see price moved higher briefly in trading this morning after posting a fresh monthly low of 9629 but failed to get above the 200 moving average (green line in the chart below) and has since rotated back to the downside.
(click to enlarge)
CONCLUSION – BEARISH
For Bulls, price needs to get above the 200 MA on the 5 minute timeframe. However be wary, up ahead is 10054, which was strong support last friday, now becomes strong resistance in trading today.
For Bears, there are many points to enter into short positions where risk can be defined. These areas being on pullback rallies into the 100 MA on the 5 minute chart (blue line in the chart above), the 200 MA on the 5 minute chart (green line), the Daily high 9991 and 10054 as aforementioned. Risk averse traders will be looking to sell a break of 9629.
Bearish targets :-
- 9629 (Daily low + Weekly S1 Pivot 9638)
- 9583 (Jan 15th low)
- 9378 (Year low)
Bullish targets :-
- 9991 (Daily high)
- 10016 (Friday close)
- 10054 (Strong support from last Friday)