DAX: Bears still facing strong support

The DAX30 moved horizontally during the last two weeks. After an intensive start of the year the volatility decreased as bears are facing currently a significant support in the 5500 price range. The support is very important in the long term analysis as there appear many long term technical factors which stop currently the downward pressure. Nevertheless the DAX seems to be still under a significant impact of the bear’s bunch which means that the result of the current battle is still unclear.

Prices broke a local 5658,7 top and a short term downward trend line which can be treated as a minor signal for short term growths. If prices break the next local resistance in the 5727,5 maximum, the four minimums in the 5500 price range could be treated as a form of a rounded bottom short term price formation and a stable support.

A situation on the German stock market should become clearer within the next days. If the above mentioned local resistances are broken, we can expect short or middle term growths. Nevertheless we should still have in mind the important support at 5500. The DAX still seems to be willing to test this support consequently and break it if possible.

Izabela Kozakiewicz

X-Trade Brokers Dom Maklerski S.A. German Branch

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