The German stock index DAX (DE 30) peaked in January 2018. In September, however, the Green Trend Channel, which has been building for several years, has been broken.
The market has tested it for a few days, but the market could not get back over its edge. This was a textbook of technical analysis. It’s been a long time ago that the pattern Falling wedge, which is usually a bull formation, was created on our chart. Although it is a bull formation, it must be remembered that when trading, it is necessary to wait until the final signal, namely the sloping of the upper or lower edge. After that, it is safer to enter the trade.
The market as a whole was easily able to crack its bottom edge, testing the long-term trendline and the strong S / R zone where rebound was expected. This, of course, occurred and the market continued to grow in the short run. He retested the lower edge (black) from which he bounced downwards. But what does the market do next?
We are currently trading on significant support close to the price level of 11,460. The strongest support on the chart is marked with a blue band, and in the case of a short-term support, the market can go here.
On the opposite side, we can consider the black edge of the above formation as strong resistance, and especially the red zone that signals the S / R zone. The indicators look rather negative. MACD slowly turns down and the Histogram drops and that means bulls are losing power. RSI rotates downwards. Of course, the support that the market currently sells, holds strong.
This analysis serves as a learning material and cannot be considered as investment advice. When trading, I recommend that you adhere to strict money and risk management.