DAX 30 & CAC 40 Charts – Levels, Lines to Contend With, but Trend Still Bullish
- DAX big-picture resistance won’t matter until bullish sequence is snapped
- CAC hits trend-line, but bullish as long as impressive channel maintained
DAX BIG-PICTURE RESISTANCE WON’T MATTER UNTIL BULLISH SEQUENCE IS SNAPPED
On Friday, the DAX nudged to a new cycle high off the December low, but as discussed last week, big-picture resistance will continue to be an ordeal for the German benchmark to handle. From a macro technical standpoint, the neckline, March 2018 low, 200-day MA, and 2011 trend-line make this area right here, right now very big.
It’s the kind of retest of major thresholds, especially the neckline, that can end up becoming a major turning point. But while this may indeed be the case, and resistance is to be respected until broken, it won’t matter until the multi-month bullish sequence is snapped.
The loose channel is guiding the DAX higher, with the lower parallel acting as the key line of support to watch. This type of structure in the intermediate-term can help keep one of trouble when looking at long-term prospects.
As long as the lower line holds then the market is still pointed higher, however; break the channel and then the forces of the longer-term topping pattern can exert pressure on the market. Clear above resistance while staying within the channel and the drive higher may accelerate.
DAX DAILY CHART (RESISTANCE, BUT STILL BULLISH SEQUENCE)
DAX WEEKLY CHART (IMPORTANT BIG-PICTURE SPOT)
CAC HITS TREND-LINE, BUT BULLISH AS LONG AS IMPRESSIVE CHANNEL MAINTAINED
The rally off the December low has been an impressive one, with the CAC maintaining a trend within a very impressively narrow channel. The French index is up against a trend-line from May, which may cause a pullback here soon, but as long as the channel stays intact no good reason to be bearish. Even if the channel breaks it doesn’t mean the market will undergo major selling, but it will at the least warrant caution for longs.
CAC DAILY CHART (T-LINE RESISTANCE, IMPRESSIVE BULLISH CHANNEL)
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