DAX Analysis August 2015 (W,M)
Created on Saturday, 01 August 2015 23:14
Written by Austin Galt
Let revise the weekly and monthly charts of the German stock index, the DAX.
DAX WEEKLY CHART
Price now looks to be rallying and has busted the PSAR resistance denoted by the dots. We have to be careful with this indicator however as the expectation is the trend is now down.
The Bollinger Bands show price bounced off the lower band and is now milling around the middle band. While the secondary high may already be in place it is also possible that we see one last surge higher to the upper band.
I have added Fibonacci retracement levels of the recent move down. Price has already clipped the 61.8% level so it is certainly possible that we have already seen the secondary high. If not, then the next level being the 76.4% level at 11980 looks like a prime option.
I have drawn a Fibonacci Fan which shows the recent low at support from the 61.8% angle. Price bounced up to just above the 50% angle before failing. It is possible we see once final bounce back up to test the resistance from the 50% angle. Let’s see.
The Stochastic indicator is bullish while the MACD is bearish. Whatever.
Let’s move on to the monthly chart.
DAX MONTHLY CHART
We can see the move into final high consisted of a parabolic rise which is often found at the end of bull markets.
Price has since traded down and just busted the support from the PSAR indicator.
The Bollinger Bands show the top traded well above the upper band which is consistent with solid tops. Price now looks to be having one last lash at getting back up to the upper band.
The all time high was accompanied by a bearish divergence on the RSI while the Stochastic and MACD indicators are both now bearish.
I have drawn a horizontal line denoting the 2011 high and price cracking that support is my minimum expectation for this bear market. That level stands at 7600.
I have added Fibonacci retracement levels of the move up from 2009 low to all time high and I am targeting the bear market low to clip the 61.8% level which stands at 6951.
Summing up, I expect the bear market to pick up some momentum heading into the end of this year.