10, January 2017

DAX (a 4-hour chart)

General overview

The European stocks traded lower amid corporate reports and Germany data.

Current situation

DAX sharply dropped on Monday. Sellers led the price from 11600 to 11500 during the first part of the day. The price broke the 50-EMA downwards and tested the 100-EMA in the 1 hour chart. The 50-EMA was neutral while the 100 and the 200-EMAs kept pointing higher in the mentioned timeframe. The resistance exists at 11600, the support stands at 11500.

MACD decreased which indicates the buyers’ positions weakening. RSI left the neutral area favoring a new move lower.

Trading recommendations

We recommend going short with the first target - 11500. When the price consolidates below the first target the benchmark may go to the level 11400.