The DAX continued its selloff in yesterday’s session, hitting a low of 11584 over concerns of a Greek default. As anticipated, when U.S. markets opened at 14:30, the rush to the exits by investors started as they assessed the European situation. Price did manage to hold against the 11606/11595 zone, as mentioned in yesterday’s article, with the lowest Hourly close of 11607.
Data out of Germany this morning, suggested that consumer sentiment remains strong with the GfK indicator rising to 10.2 from 10.1 a month earlier. This is the highest level since October 2001, promising signs for Europe’s strongest economy. – read full article here
Looking at an Hourly chart of the DAX below, one can see price has continued to hold against the 11606/11595 zone in trading today. Value investors continue to buy the dips.
(click to enlarge)
CONCLUSION – NEUTRAL
The 11606/11595 zone has held price so far…but bears continue to weigh on this zone, with constant tests into this area. Be wary in trading today however, as the market is quite choppy, so it is essential to wait until price has moved into risk defining areas before taking a position to limit potential losses.
For bulls, price needs to hold against the 11606/11595 and edge back upto the Hourly 200 moving average (green line in the chart above). For risk averse investors, price needs to get back above the 11776/11751 zone which will be clear of the Hourly 100 & 200 MA’s by then.
For bears, price needs to hold underneath the Hourly 200 MA. Expect shorting positions at this level and into the 11776/11751 zone on any retracements. For risk averse, shorting opportunities reside on a break of the 11595 level, ideally closing below this level on the Hourly timeframe. If that occurs, the next main target of focus will be the 11467/11457 zone.
Bearish targets :-
- 11522 (Daily S1 Pivot)
- 11467 (Key zone)
- 11443 (Extension in the Daily range – avg. last 22 days is 246 pips)
Bullish targets :-
- Hourly 200 MA
- 11751
- 11841 (Extension of Daily range & into 11858/11842 zone)