DAX – Large head and shoulders top potentially forming on the long-term charts

Pia-first Team PIA-first

Technical

Monthly: Broken out of the channel formation to the downside. This is negative for sentiment and the downtrend has potential to return. A lower correction is expected. We have a 50% Fibonacci pullback level of 11148 from 8695 to 13601.

Weekly: The bearish engulfing candle on the weekly chart is negative for sentiment. A bearish Head and Shoulders is forming. A break of 11703 is needed to confirm follow through negative momentum. A sequence of weekly lower lows and highs has been posted.

Daily: A sequence of daily lower lows and highs has been posted. As this corrective sequence continues we look to set shorts on a rally at better risk/reward levels. Previous support level of 12102 broken. A mild correction has been posted from yesterday’s low, this is seen as a retest of the breakout level. Further downside is expected although we prefer to set shorts at our bespoke resistance levels at 12100, resulting in improved risk/reward. Expect trading to remain mixed and volatile.

We look toSell at: 12100
Stop: 12250
Targets: 11750 and 11150

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Author

Pia-first Team

PIA-first

Our analysis service is provided by 4 market professionals who have between them spent 85 years in investment bank and professional firm dealing rooms as traders, salesmen and analysts.

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