Dax rally presents selling opportunity

Ian Coleman FXStreet

Technical

Monthly: Looks to be forming a bearish Ending Wedge pattern. A break of trend line support at 12145 and the measured move target is 8695. Rallies have stalled and found sellers near 13200.

Weekly: Forming a bearishHead and Shoulders pattern. A break of 11593 (neckline) is needed to confirm the pattern. Themeasured move would then be 9728. 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 has been followed by a bearish engulfing. The last 3 weeks have corrected higher and this may provide a selling opportunity.

Daily: Price action has stalled at 12100 and a correction should find resistance around the 13000 psychological area. The downward trend line resistance and 78.6%fibonacci retracement, will give medium term bears additional confidence. Preferred trade is selling on a rally to 13000.

Action:

We look to Sell on a rally at 13000

Stop: 13200

Targets: 12300& 11700

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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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