Dax: end to lower weekly highs and rally above averages is bullish
A sequence of lower weekly highs was ended last week with investors buying the Dax for a fourth week in a row from close to the 100-day average rate and for sentiment to rally by almost 400 points. The market has also been posting higher monthly lows since basing at 8,690.5 in February, a key 50% pullback to the entire 2011-2015 gains and more recently prices are trading above their 200-day average rate. With no sign that demand for the Dax is ending, but with daily signals overstretched the outlook for this week is to stay long and buy dips.
Management and risk description
Allow room to buy the dip and raise the stop to entry if the first target is met.
Entry: market and 10124.0, the 200-day average.
Stop: 9957.0, Tuesday's Marabuzo line.
Target: 10522.0, April's high and 10729.0, the window which has remained open since last year's close.
Time horizon: Until 11 GMT, Friday
— Edited by Clare MacCarthy
Non-independent investment research disclaimer applies. Read more