DAX in one-hour bearish channel

The correction in the DAX has been rather shallow when compared to the FTSE 100.

This morning's rally was short-lived, and we may well have witnessed what was realistically a dead-cat bounce; particularly since the pivotal 8000 level has once again given way to downside.

With the daily price action trading below the 50 and 100 day moving averages (DMA), as well as the 38.2% Fibonacci retracement of the mid-November rally to the highs of May, the bias remains rather bearish.

In order to remain in the uptrend seen since June of last year, I would like to see the 200 DMA hold fast at 7755, which coincides with the 50% retracement and rising support from those June 2012 lows.

The hourly chart shows that the price has been in a bearish channel since 28 May. Today’s early morning rally comes from the RSI rising from the oversold area below 30, and the support comes from the bottom of the channel.

This is most certainly a case for selling the rallies.

 

DAX - Germany 30 chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.