Thursday, April 30, 2015

DAX Germany Daily Chart H&S Pattern Downward-Sloping Channel

The DAX was bludgeoned -3.2% on Wednesday in a mini-crash. Price lost the H&S (head and shoulders) neckline at 11700. The head is at 12400 which is a 700 difference, thus the downside target is 11000 (11700-700) which lines up with horizontal price support from February.

Price may want to back kiss the neck line at 11.7K in the near-term. The stochastics, MACD line and histogram each would prefer to see price come back down for a lower low after any bounce occurs. And any bounce would likely target the neckline for the back test. The blue channel is in play.The ADX shows the strong uptrend in price ended in mid-April (the black line fell under 25-ish). The ADX stumbles sideways and is starting to perk up as the DAX drops. If the ADX moves above 25 that will confirm that the price move lower through the blue channel is a strong trend lower that will continue. For now the jury is out.

Price bounced off the horizontal support from early March at 11.4K-ish. The expectation is for the H&S to play out moving forward. 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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