DAX – Breaks the Head and Shoulders top

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Monthly: Forming an Ending wedge pattern. Bearish divergence can be seen on the monthly chart (the chart makes a higher high while the relative strength index makes a lower high). A break of trend line support and the measured move target is 8695

Weekly: Looks to be forming a bearish Head and Shoulders pattern. Current price faces trend line support at 11550. The most interesting factor about this time frame is that 261.8% extension of the 13601-11703 move is located just below the aforementioned measured move target at 0.8631

Daily: Close to an exhaustion count on the intraday chart so there is scope for a corrective ‘bounce’. Previous support now becomes resistance at 11703. Bespoke resistance is seen at 11770. The preferred trade is to sell into rallies but a sustained break of trend line support (at 11550) would indicate the selloff is set to continue


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