DAX pulls back on Friday, but finds buyers
The German index pulled back a bit during the day on Friday but found enough support at the €12,200 level to form a hammer. The hammer of course is a bullish sign, and therefore I think that the buyers will probably flock to this market. However, I see a lot of noise just above so don’t think that this is going to be an easy move. If we pull back from here, I think there is plenty of support at the uptrend line underneath, and of course the psychologically important €12,000 level. I think that the overall attitude of the market remains bullish, but of course is tied to how things work out with the negotiations between the United States and China. Ultimately, if we avoid some type of massive trade war, I think that the DAX will benefit in a “risk on” attitude.
If we were to break down below the uptrend line, the market would bring in fresh selling. I think at that point; the market will probably unwind to about the €11,500 level. Ultimately, this is a market that will be a bit volatile, but certainly looks as if there is a lot of structural support underneath. If we can break above the €12,750 level, the market should then go to the €13,500 level above, which has been significant resistance. I believe that adding slowly is probably the best way to play this market, because there is so much in the way of risk out there that could move stock markets overall.
DAX Video 09.04.18
This article was originally posted on FX Empire