Friday, March 14, 2014

DAX Germany Weekly Chart Rising Wedges H&S

The DAX is getting slapped over the last couple weeks as the Ukraine situation continues. Germany is very reliant on natural gas and oil from Russia so the Crimea annexation is causing serious stress between these two nations. The DAX is down over -8% from the top in January and down about -6% for the year. DAX lost -2% yesterday and is heading for a weekly loss of about -4%. The maroon lines show the initial rising wedge and negative divergence spank down in January. Price came back up to the highs since the MACD line had some remaining gusto but the red lines show the negative divergence and long-term rising wedge that creates the spank down over the last two weeks.

The indicators are weak and bleak printing lower lows. The RSI and stochastics are under 50% in bear territory. The MACD lines cross in January and remain on a sell signal. The ADX shows a strong uptrend in place for early 2013 but that petered out by summer time. During the final four months of 2013, the DAX catapults higher, fueled by the weaker yen (higher dollar/yen). This is a strong trend with the ADX near 30 but note how the black line is rolling over to the downside. Once the ADX loses the pink box the strong uptrend will be officially over. The ADX red line is crossing above the green line which is a bearish signal.

The DAX has not touched the 50-week MA at 8698.30 in almost two years; very uncharacteristic chart behavior. Since the 20-week MA failed, a further move lower towards the 50-week MA is a reasonable expectation as the weeks play out. A head and shoulder pattern is in play. The blue lines show a head at 9800-ish, neck line at 9000, so the downside target is the 8100-8200 support level if the 9000 level fails. Projection is sideways to sideways lower moving forward. DAX is currently printing 8980 failing the 9K level by 20 points, down -0.4% today. Bears must keep pushing lower. Bulls must recover the 9K level and close above, otherwise, more trouble is on tap. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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