Market Technical View is a blog that mostly concerns the technical analysis of different financial instruments like indices, commodities, stocks, ETFs and currencies.

All the posts are structured in 3 main chapters that can be found in Content, in the upper right-hand corner of the blog.

Market perspective. The technical approach consists of chart patterns and important support/resistance zones. The purpose of this section is to give directions of the price on short and medium term (a few days up to a few months).

Trading setups. The analysis posted here will provide trading scenarios based on different technical tools.

Romanian Market. This is a section dedicated to Romanian stocks and indices.

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Wednesday, December 14, 2011

DAX Technical Analysis 2011.12.14

DAX index continues the short term decline, breaking through the 50% retracement level (5,770) and testing now the 61.8% retracement level.
As stated in the previous analysis, the main support zone is between the 5,680 and 5,849 levels.
On medium term (a few months) we are looking at higher lows and one sharp rally that ended in late October at 6,425 level. Having this in mind and adding the possible bullish reversal on RSI, I am looking for a confirmation of reversal in this area in order to give buying signals.

On the 30min chart (a closer look) I plotted the falling wedge pattern, which usually leads to a sharp move in the opposite direction. Moreover, this wedge could end up as a final wave of a 3 wave corrective move (down) started in early December. The wedge pattern implies, in many cases, a final thrust that is travelling beyond the T2 trend line, before the direction change. 

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