Dax rallies continue to attract sellers

Ian Coleman FXStreet

Technical

Monthly: Looks to be forming a bearish Ending Wedge pattern. A break of trend line support at 12048 and the measured move target is 8695. Rallies have stalled and found sellers near 13200, resulting in a new trend line resistance. Shooting star candles highlight rejections of attempted rallies.

Weekly: Looks to be forming a bearishHead and Shoulders pattern. A break of 11633 (neckline) is needed to confirm the pattern. Themeasured move would then be 9764. We posted a bearish Outside Week (often an indication that a top is in place) at the 78.6% pullback level of 13195 (from 13601-11706). This week is forming a bearish engulfing week and the swing low at 12537 has been broken.

Daily: A full AB=CD corrective formation has completed and sellers have returned. A pull-back and re-test of the swing high at 13200 has been rejected and further downside is expected. The break of 12537 has confirmed a double top formation with a measured move target of 11865. Preferred trade is selling on a rally to 12800.

Action:

We look to Sell on a rally at: 12800
Stop: 13200
Targets: 12125 & 11865

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Author

Ian Coleman

FXStreet

Ian started his financial career at the age of 18 working as a Junior Swiss Broker at Godsell Astley and Pearce (London). He quickly moved through the ranks and was Desk Manager at RP Martins at the age of 29.

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