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Trade update: DAX trade idea

The DAX is showing signs of turning around and with 60 points in the bag, it seems a good place to reduce exposure.

Data chart
Source: Bloomberg

The DAX has rallied relatively consistently since we put out the bullish trade idea, based upon the break through 10,121. However, we are seeing signs that a reversal lower could be in the offing.

The weekly chart shows that price has come into a cluster of moving averages, with the 50-week simple moving average in particular sparking the last top in April.

DAX weekly chart

The failure to create a new high and subsequent break to the downside also provides a hint that we may see a strong move lower from these areas. For that reason, it makes sense to cut gains short with such major event risk ahead this week.

DAX hourly chart

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