Wednesday’s optimism failed to materialise on Thursday and
stocks slid broadly, with the DAX losing around 0.5 percent during the London
session. US markets are closed today for the Thanksgiving holiday, but futures
on the US indices remain open for most of the day.
The major support for the DAX index is now at previous lows
near 11,050 EUR and if the price remains above, it seems like a double bottom
pattern, which is a bullish reversal formation. The potential of this formation
is around 600 points and the resistance of this pattern is slightly above
11,600 EUR.
From the intraday perspective, the first zone to be taken advantage of remains at the
bearish trend line, which is currently at 11,330 EUR. As long as DAX remains
below this line, the immediate outlook seems bearish.
The RSI indicator suggests a bullish divergence on the daily
chart, which could be a bit positive for DAX. However, bulls need to defend
11,050 EUR and then push the price above the trend line to negate the actual
downward momentum.
The afternoon session will probably be very quiet, due to
the closed US markets and therefore most traders will take Friday off. Normal
trading should start again on Monday.
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Analysis
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