Equity markets across the globe have been rallying today off the back of bullish sentiment. In Asia, investors took heart after the BOJ bought 2.5 trillion yen of short-term bills in a regular debt-purchasing operation. In the U.S. yesterday, the Nasdaq Composite, the U.S. market index most closely associated with technology stocks, closed at an all-time high on Thursday, surpassing a 2000 record set just before the dotcom crash.
In Europe, German Chancellor Angela Merkel who said on Thursday everything must be done to prevent Greece from running out of money. Data released this morning, the German ifo’s business climate index, based on a monthly survey of about 7,000 firms, climbed to 108.6 in April from 107.9 in March. That was its highest reading since June 2014 and was slightly higher than a forecast of 108.4. Also circulating in the news, is talk of Greece starting to make amendments to the necessary reforms needed for more liquidity assistance – see full article here
Looking at the Hourly chart of the DAX below, one can see price held around the key 11775/11750 zone in trading yesterday. It started to move below in today’s session, but reversed quickly to the upside off the back of positive German data. The Houlry 100 moving average (blue line) and the 11840/11860 zone capped price from extending any further to the upside.
(click to enlarge)
CONCLUSION – NEUTRAL
Bullish sentiment has re-entered the psyche of traders globally after the Nasdaq soaring to new all-time highs yesterday and potential light in the distance with regards to the Greek situation. This coupled with positive date out of Germany today, should be bullish for it’s primary index, the DAX. However, the intermediate trend is still down and bulls still have work to do. Ideally the 11750 area should hold again, with the 11840 zone being reclaimed with quick succession of the Hourly 100 MA. If price manages to clear this level, my bias would switch to bullish. If the 11750 area fails to hold, look for further tests of yesterday’s lows of 11671, 11631 with final targets of 11606/11595 as bulls will seek value levels in the DAX at that point.
For bulls, buying opportunities reside into the 11775/11750 zone or a break above the Hourly 100 MA.
For bears, shorting opportunities reside on retracements into the 11840/11860 zone or a break of 11750.
Bearish targets :-
- 11705 (Today’s low)
- 11631
- 11600 (11606/11595 key buy zone for bulls)
Bullish Targets :-
- 11860
- 11931 (key line and Daily Pivot)
- 11975 (The Hourly 200 MA)