Technical Analysis – GER 40 index gets bearish vibes after record high
August 2, 2023 1:27 pm
The German 40 index (cash) unlocked a new record high of 16,530 last Friday before charting a bearish doji candlestick. Monday’s downfall confirmed the negative pattern, with the price further retreating to a three-week low of 15,949 earlier today.
The technical oscillators took a negative turn too, flagging more weakness ahead. If the price closes below its 20- and 50-day simple moving averages (SMAs) at 16,000, the tentative support trendline from the October lows could provide another opportunity for a rebound nearby at 15,800. A step below that line would heighten concerns of a bearish trend reversal, with the confirmation expected to come below the previous low of 15,454. In this case, the 200-day SMA could come to the rescue at 15,225. Otherwise, the sell-off could stretch towards the 14,800 support region.
An upside reversal could re-examine the all-time high of 16,530 and perhaps the tentative line that connects the previous two highs at 16,600. Even higher, the extensions of the two ascending lines drawn from February and last August could halt the rally at 16,900 and 17,330 respectively.
To sum up, the German 40 stock index could experience a new bearish wave following the peak at a new record high, with the risk expected to get larger below 15,800.
The German 40 index (cash) unlocked a new record high of 16,530 last Friday before charting a bearish doji candlestick. Monday’s downfall confirmed the negative pattern, with the price further retreating to a three-week low of 15,949 earlier today.
The technical oscillators took a negative turn too, flagging more weakness ahead. If the price closes below its 20- and 50-day simple moving averages (SMAs) at 16,000, the tentative support trendline from the October lows could provide another opportunity for a rebound nearby at 15,800. A step below that line would heighten concerns of a bearish trend reversal, with the confirmation expected to come below the previous low of 15,454. In this case, the 200-day SMA could come to the rescue at 15,225. Otherwise, the sell-off could stretch towards the 14,800 support region.
An upside reversal could re-examine the all-time high of 16,530 and perhaps the tentative line that connects the previous two highs at 16,600. Even higher, the extensions of the two ascending lines drawn from February and last August could halt the rally at 16,900 and 17,330 respectively.
To sum up, the German 40 stock index could experience a new bearish wave following the peak at a new record high, with the risk expected to get larger below 15,800.
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