Technical Analysis – GER40 cash index is ready for another move
May 15, 2023 12:28 pm
The GER40 cash index is a tad below the August 13, 2021 high of 16,030, and is flirting with the highest print since January 2022. It has recorded an impressive 35% rally since the October 3, 2022 low, but it now appears to be somewhat toppy.
While the Average Directional Movement Index (ADX) is hovering below its 25-threshold and signaling a trendless market, the stochastic oscillator is ready to give a strong signal. It is currently battling with its moving average (MA) and as such, its next move is critical for market sentiment.
A decisive drop aggressively below its MA, would be seen as a bearish sign. On the other hand, a move above its MA and back inside its overbought territory would point to a continuation of the current short-term bullish trend. Nevertheless, the tightness of the Bollinger Bands, similar to the mid-February period, is a clear sign of an imminent move in the GER40 index .
Should the bulls remain in control of the market, they would clearly try to post a higher high, above the August 13, 2021 high of 16,030. Even higher, the November 19, 2021 high at 16,297 would be the last hurdle before the index enters uncharted waters.
On the other hand, the first target for the bears could come at 16,017, the 50-day simple moving average (SMA). Lower, the path becomes trickier at the busy 15,271-15,340 area, populated by the January 17 high, the 78.6% Fibonacci retracement level of the November 19, 2021 – October 3, 2022 downtrend and 100-day SMA respectively. This is a key area for market sentiment and if successfully broken, the bears would aim for the 14,828 level.
To sum up, the GER40 cash index is close to making a higher high, but all eyes are on the stochastic oscillator and the tightening Bollinger Bands.
The GER40 cash index is a tad below the August 13, 2021 high of 16,030, and is flirting with the highest print since January 2022. It has recorded an impressive 35% rally since the October 3, 2022 low, but it now appears to be somewhat toppy.
While the Average Directional Movement Index (ADX) is hovering below its 25-threshold and signaling a trendless market, the stochastic oscillator is ready to give a strong signal. It is currently battling with its moving average (MA) and as such, its next move is critical for market sentiment.
A decisive drop aggressively below its MA, would be seen as a bearish sign. On the other hand, a move above its MA and back inside its overbought territory would point to a continuation of the current short-term bullish trend. Nevertheless, the tightness of the Bollinger Bands, similar to the mid-February period, is a clear sign of an imminent move in the GER40 index .
Should the bulls remain in control of the market, they would clearly try to post a higher high, above the August 13, 2021 high of 16,030. Even higher, the November 19, 2021 high at 16,297 would be the last hurdle before the index enters uncharted waters.
On the other hand, the first target for the bears could come at 16,017, the 50-day simple moving average (SMA). Lower, the path becomes trickier at the busy 15,271-15,340 area, populated by the January 17 high, the 78.6% Fibonacci retracement level of the November 19, 2021 – October 3, 2022 downtrend and 100-day SMA respectively. This is a key area for market sentiment and if successfully broken, the bears would aim for the 14,828 level.
To sum up, the GER40 cash index is close to making a higher high, but all eyes are on the stochastic oscillator and the tightening Bollinger Bands.
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