The German index has rallied a bit during the trading session on Monday to break above the €15,600 level. This is a very strong sign, as we have broken above multiple candlestick for the last couple of weeks. The 50 day EMA sits underneath and is starting to curl higher. The 50 day EMA of course is an indicator that a lot of people pay close attention to, and it is approaching the crucial 15,500 level. Furthermore, we had broken a major downtrend line, so therefore it makes quite a bit of sense that we would see more momentum coming into this market.
Any dip at this point in time will more than likely find plenty of support near the 15,250 level, so I do not have any interest in shorting this market. If we were to break down below there, then we could go looking to the 15,000 level. The 15,000 level of course is a large, round, psychologically significant figure and also is important due to the fact that there is the 200 day EMA sitting right there as well. With this being the case, the market is likely well supported, and it is worth noticing that the DAX has been turning higher for a while, and you could even make an argument for a bullish flag just now being broken to the upside. If that is going to be the case, then it is a measured move we should be looking for. It suggests that we are going to go looking towards the highs again, and perhaps even just above there.
The market participants continue to see a lot of momentum jumping into this market, as you could even make the argument that we have just broken the top of a bullish flag. That suggests that there are buyers come in and pick this market up. Even if we do dip at this point, I would not be a seller until we get a daily or maybe even a weekly close below that 15,000 level. In general, this is a market that gets a lot of momentum from the global reopening as well, as the DAX is full of industrial leaders that have a huge amount of influence around the world if there is in fact going to be a greater reopening situation being traded.
