DAX Market Analysis, juni 2021
April was fairly slow and quiet month for DAX after a very strong March. On April 16 and 19, DAX tried to enter into a new leg up but these were sold fast and DAX closed the month at +0.5%
May was a bullish month for the DAX index and ended at a +1,8% gain for the month. The shooting star candlestick formation for April, which suggested selling pressure ahead, is now invalid. DAX tried to start pullbacks at several points but the monthly EMA12 level held and all pullback attempts were bought by the bulls. Speculations about inflation and rising interest rates tried to shake the markets but the bears lost the battle and May ended with a candlestick that suggest buying pressure.
On the monthly chart, the trend continues to point north. DAX is however somewhat far away from its moving average EMA6 and thus it is quite likely that we will see an EMA6 pullback test within the near term future. Advancing indices during the summer months are rarely seen and the current up trend has been very strong this year.
Long term levels of support: 14800, 14000
Long term levels of resistance: 15600, 16000
Below on the weekly chart we can easily see that DAX did a significant move down each week during May to test the weekly moving average EMA6 which held intact. The weekly EMA6 has been a good support level and entry level for DAX for several months. The mid term trend is still bullish and the monthly pivot point R1 (15720) is an important level if DAX continues to seek higher price levels. For pullbacks, another EMA6 test and below is quite likely since the current bull run has lasted very long.
Medium term levels of resistance: 15720, 16000
Medium term levels of support: 15000, 15160
For the bullish trade, look for an entry near the weekly EMA6 (currently at 15162). For this strategy, there are several options available depending on risk appetite. One option could be:
For the bearish trade a good entry could be at monthly pivot R1 15720 and level 16000 is resistance. As an example would be:
US investor sentiment is now in bearish territory, which was last seen in November 2020. Also the volatility has clearly been rising.
June has historically been somewhat negative for the DAX
Above: McClellan oscillator is back in bullish mode.
Above: Split of stocks in DAX index that are above or below their respective DMA20 averages. The indicator is again above its zero line which is bullish.
Above: Summary of technical indicators of stocks in DAX index. We are again in buy mode.
Above: DAX historical weekly and daily changes
Above: World’s main futures continue in strong buy yet again.
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