Hi Traders! Dax technical analysis and short term forecast 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 evidence 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 Home Trader Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the H4 chart here.
On the H4 chart, the price which is moving higher has reached a key resistance zone that has formed based on the 61.8%(16486.40) Fibonacci expansion level of the first wave. The price respected this zone and is currently bouncing lower from it. In addition to this, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line) here, and the main signal line (silver line) reads value over 25, we may consider this as an evidence of bearish pressure. In addition to this, based on the Parabolic Sar we could see that the dot is above the price which we may consider as yet another evidence of bearish pressure. Also, currently there are no signs opposing this short term bearish view. We may now move down to one timeframe lower and see if we can find evidences supporting this bearish view.
On the H1 chart, the price which was moving higher has reached a key resistance zone that has formed based on the 61.8%(16576.69) Fibonacci expansion level of the first wave. This key resistance zone coincides with the H4 key resistance zone, which makes this a very strong powerful zone. The price which is moving higher has reached this zone, respected it and is bouncing lower from it. Also, we have a bearish divergence that has formed between the first high that has formed at 16447.80 and the second high that has formed at 16531.80 based on the MACD indicator which we may consider as evidence of bearish pressure. Also, the price which is moving lower has broken below the most recent uptrend line which we may consider as another evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and until the key resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further.
Dax H4(4 Hours) Chart Analysis
Dax H1(1 Hour) Chart Analysis
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
Home Trader Club Team.
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