DAX – Inverse Head and Shoulders on Short term charts
Weekly: The DAX has undergone a large correction over the past 50 weeks having reached a high at 13601 in January 2018. The move lower has stalled at the 61.8% Fibonacci retracement level at 10569. A bullish hammer candle formed on the weekly charge, which suggests that the near-term sentiment is about to shift.
Daily: The DAX completed a large head and shoulders top pattern on the move below support at 11703 and we now expect this to act as resistance. A corrective rally is already underway, and we expect this to play out over the coming weeks before selling resumes, considering the longer-term time frame.
Intraday: An inverse head and shoulders bottom pattern has formed on the intraday chart (1H). The break above resistance at 10645 completed the pattern and we now look for a re-test of this level to initiate fresh long positions. The formation has a measured move target of 11005. Further upside is expected but we prefer to set longs on a dip towards 10645.
We look to Buy at 10645
Stop: 10570
Targets: 11005 and 11220
