DAX Analysis March 2015 (D)
Created on Sunday, 01 March 2015 23:29
Written by Austin Galt
The DAX has surged higher which nullified the previous analysis pretty quick smart. So can we expect a top shortly? Let’s find out using the daily chart.
DAX DAILY CHART
The Bollinger Bands show a small correction in early February that couldn’t even make it to the lower band indicating strength. Price is now clinging to the upper band and any correction now should find support around the middle band. Breaking below the middle band would look a little ominous in my opinion.
I have drawn an uptrend line which has held this uptrend and I’d like to see this support line hold any correction. Breaking below there would also look a little ominous.
The Parabolic Stop and Reverse (PSAR) indicator has a bullish bias with no threat from price yet.
The Relative Strength Indicator (RSI) and Stochastic indicator are both making new highs suggesting this move up still has a way to go. I’d like to see a couple of corrections before price moves back up to new highs while these indicators set up bearish divergences.
Now caution needs to be heeded as because this appears to be a parabolic blow off move so these indicators might be big outlier readings and we get no bearish divergences.
Certainly, these lower indicators are in extremely overbought territory so something will have to give shortly. Just how much it will give is the big question.