DAX rallies during the week but finds resistance just above

The German index rallied a bit during the trading sessions making up the previous week, reaching towards the 20 SMA and the Bollinger Bands indicator. The €12,750 level above should be resistance, so although this looks a bit bearish, I think it is a short-term pullback.
Dax weekly chart, April 23, 2018
shutterstock_392120233 – Copy

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

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