Short term
/
Sell
Trade view / 26 September 2017 at 10:15 GMT

UPDATE: Dax strength masks technical concerns

Director / PIA-First Limited
United Kingdom
Instrument: GER30.I
Price target: 12500 & 12350
Market price: 12625
Background

The lon- term trend and bias in Dax remains bullish with prices extending higher from the February 2016 lows.

The Q3 '17 correction lower was well overdue and after the weekly bullish hammer (Aug/Sep) prices reacted sharply higher towards our medium term target of 12,675.

The pace of the reaction has led to the RSI moving towards overbought conditions and with signs of bearish divergence on daily and 4-hour time frames, their are hints of a possible correction.
A break below 12,500 should lead to a move towards filling the daily gap and 50 & 200-day moving average area.

As intra-day rallies continue to attract sellers there is also a good risk/reward contrarian opportunity.

Parameters

Entry: Sell GER30.i at current levels (12,625),on a rally to 12,675 and on a break of 12,500

Stop: A break above 12,750

Target: 12,500 & 12,350

Time horizon: 2 weeks

Charts:
Weekly chart highlighting bullish channel
d1
Source: Saxo Bank
 
Daily chart highlighting bearish divergence
d2
Source: Saxo Bank
 
Daily chart showing upward trending support at horizontal support level (12500)
d3
Source: Saxo Bank
 
4-hour chart highlighting bearish divergence and bearish candles
d4
 Source: Saxo Bank

— Edited by Clemens Bomsdorf

Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on TradingFloor.com is found here
2y
bargee bargee
There`s also a gap at 12283 to be filled.
2y
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
Thanks Bargee! I mentioned the daily gap but not the actual level. Thank you!
2y
Morris Morris
"There is also a good risk/reward contrarian opportunity" I agree to this. That final move up! Let see.
2y
Jan Berg Jan Berg
Don't fight the trend...
2y
Steve O'Hare - First 4 Trading Steve O'Hare - First 4 Trading
Thanks Jan! My medium term view remains bullish. This short term trade has been stopped this morning. https://www.tradingfloor.com/posts/buy-dax-in-front-of-12200-ohare-8927757
2y
m7010306 m7010306
Admire those shorting this market.
2y
Morris Morris
That final leg up materialized!
2y
Morris Morris
A weaker Euro may be a contributor!

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