DAX Treading on Trend-line, Important for Near-term Outlook
- DAX turns lower from resistance
- Trading on December trend-line, important it holds in the near-term
- A break and no significant support until the 11400/500 area
On Thursday, we said the DAX looked headed towards the old record highs from 2015 at some point, but if it were going to do so it was going to have to clear some nearby resistance. The first levels (lines) came in by way of a pair of top-side trend-lines extending back into the spring and summer of last year, of which one came in right at the Wednesday high. The turn lower from resistance quickly brought into play a trend-line from December as the Jan high failed to act as support.
This is a fairly crucial area, at least in the short-term. While a break of the trend-line doesn’t constitute a trend change, it does weaken the backdrop in the near-term without significant support then arriving until the 11400/500 vicinity. A daily close below Friday’s low of 11722 would be important as it would clearly be a break of the trend-line. The swing low on 2/17 (11693) at that point would only be considered minor support, with no significant support coming in until the 2/8 low at 11480 down to 11405.
However, if the trend-line can hold, then with a little work the DAX could find itself funneling back higher towards the top-side trend-lines it turned lower from and 12079 level.