Hi Traders! Dax short term forecast and technical analysis is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the H4 chart here.
Dax H4(4 hours) Chart Analysis – Key Resistance Zone, Bearish Divergence, CCI Indicator
On the H4 chart, while measuring the big and small wave we have using the Fibonacci expansion tool, we have a key resistance zone that has formed. This key resistance zone is formed by the 161.8%(16593.73) Fibonacci expansion level of the big wave, the 61.8%(16354.76) Fibonacci expansion level of the small wave. The price which was moving higher, reached this zone, respected it and is currently bouncing lower from this zone. Also, we have a bearish divergence that has formed between the first high that has formed at 15978.80 and the second high that has formed at 16287.30 based on the MACD indicator. In addition to this, we have an uptrend line breakout based on the CCI indicator which we may consider as yet another evidence of bearish pressure and also, currently there are no signs opposing this short term bearish view. We may now move down to lower timeframe and look for evidences supporting this short term bearish view.
Dax H1(1 hour) Chart Analysis – Bearish Convergence, Stochastic Oscillator
Looking at the H1 chart, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 16201.80 and the second high that has formed at 16287.30 based on the MACD indicator. The price then moved lower and broke below the last low at 16076.80 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider these as evidences of bearish pressure. Generally, after a bearish convergence we may look for corrections and then further continuation lower. Currently, it looks like a correction is happening. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. Until the H4 key resistance zone holds my short term view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
Dax H4(4 hours) Chart Analysis
- Key Resistance Zone, Bearish Divergence, CCI Indicator
Dax H1(1 hour) Chart Analysis
- Bearish Convergence, Stochastic Oscillator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
