DAX rallies during the week but finds resistance just above

The German index rallied enough during the week to reach the 20 SMA, but then pulled back on the weekly chart to form a bit of a shooting star. If you can break down below the bottom of the shooting star, the market probably goes lower, but I think it will be a bit to find support and value more than anything else. I don’t necessarily want to short this market, I think that pullbacks give me an opportunity to take advantage of value. I believe that the €11,800 level underneath is the bottom of a major support level that extends from the €12,000 level. I think that pulling back from here should find plenty of buyers underneath to look for value. I believe that if we can break above the top of the shooting star for the week, and more importantly the €12,750 level, the market will then go to the €13,500 level. I like the DAX in general, but I recognize we may have to build a bit of momentum in this area after building a bit of a floor to go higher.

If we were to break down below the €11,800 level, the market could unwind towards the €11,000 level, perhaps even lower than that. However, I believe that the upward proclivity this market should continue, and I think that we will continue to see DAX as a good way to play risk appetite in general. If we can stay at a trouble geopolitically, I think that the DAX will find buyers.

DAX Video 23.04.18