18, October 2016

DAX (a 4-hour chart)

General overview

European stocks opened lower on Monday when Pearson (media group) and Marine Harvest (sea products producer) shares decline weighed on stocks.

Current situation

DAX index gapped downwards on Monday. The price jumped from the mark 10575 to 10538. The price briefly strengthened and was able to erase its losses. However, the recovery turned out to be short-lived and DAX soon turned around. Prices decreased to the 10500 level region during the European hours. The price is sandwiched between the 50-EMA on the one side and the 100 and 200 EMAs on the other. The 50-EMA acts as a resistance, the 100 and 200 EMAs provide a strong support for the index. The 50 and 100 EMAs are moving downwards, the 200 EMA is slightly bullish. The resistance is seen at 10600, the support is at 10500.

MACD indicator is at the centerline. If the histogram enters the negative territory, that will indicate sellers’ growing strength. If MACD returns into the positive area the buyers will take control over the market. The RSI oscillator moved downwards.

Trading recommendations

As the most probable scenario, we expect the 10500 level breakthrough and further moving downwards towards the mark at 10430.