DAX 30/CAC 40 Technical Highlights
- DAX over trend-line resistance but price action weakening
- CAC looks headed for a test of trend-line off December low
DAX over trend-line resistance but price action weakening
Last week, the discussion was aimed towards the notion that extended prices favored a pullback soon. And despite having crossed over the trend-line off the record high the bias is still shaping up to favor a pullback, or at least shift risk far enough towards a pullback that it puts longs in a tenuous position.
Momentum has slowed to a crawl without any retracement, so if it is to happen is should do so very shortly here. If not, then one more push may take it up to a swing-high from September around the 12450-mark before putting in a trade-able ceiling for the DAX.
All-in-all, risk is that weakness this week looks to be in the cards. A drop below the trend-line off the 2018 high is anticipated. How any decline unfolds (strong or weak selling) will dictate whether to turn aggressive on short-term shorts or use it as a possible ‘dip-trip’ set-up for longs.
DAX Daily Chart (stalling, could fall back below t-line)
CAC looks headed for a test of trend-line off December low
The CAC like the DAX is of course acting similarly. It is currently shelving itself on a support area formed by several peaks from last year, but a drop through 5538 should help accelerate downward momentum in the short-term.
This would then bring into play a test of the sharply angled trend-line off the December low and a pivotal spot for the market to either turn back higher from or fail and bring in more sellers.
CAC Daily Chart (watching for test of December t-line)
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—Written by Paul Robinson, Market Analyst
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