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DAX 30 Technical Outlook: Daily Correction

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by , 03-25-2019 at 03:48 PM (138 Views)
      
   
Last week’s strong closing candle is coming from a big area with long-term implications. The head-and-shoulders top I’ve been discussing for months had its neckline thoroughly tested after it broke in October. Retests are a common occurrence for these types of patterns before their full bearish potential is realized.

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In confluence with the neckline is the decisively falling 200-day MA, the underside of the 2011 trendline which was also broken in the fall, and the low from almost exactly one year ago today.

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What was helping keep sellers at bay in the interim, though, was the constructive trend off the December low, with the lower parallel of the channel acting the guide. With last week’s break of not only the lower parallel but also lows created over the past several weeks the path of least resistance is setting up for sellers to regain control.

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