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.
Dax H4(4 Hours) Chart Analysis – Strong Support Zone, Bullish Convergence, Stochastic Oscillator
On the H4 chart, the price which was moving lower reached a strong support zone respected it and bounced higher from this zone. Also, we could see that the price has created a bullish divergence which formed between the first low formed at 14625.30 and the second low formed at 14588.30 based on the MACD indicator. The price then moved higher and broke above the last high at 14943.55 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidence of bullish pressure. 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. So everything looks good here for the bulls and we may now move down to lower timeframe and see if we can find evidence supporting this short-term bullish view.
Dax H1(1 Hour) Chart Analysis – Bullish Trend Pattern, Stochastic Oscillator
On the H1 chart, the price which was moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bullish pressure. In addition to this, currently there are no signs opposing this short term bullish view. So everything looks good here as well for the bulls and until the strong support zone (marked in green) shown in the image below holds my short-term view remains bullish here and I expect the price to move higher further after pullbacks.
Technical Analysis & Forecast Summary
Dax H4(4 Hours) Chart Analysis
- Strong Support Zone, Bullish Convergence, Stochastic Oscillator
Dax H1(1 Hour) Chart Analysis
- Bullish Trend Pattern, 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 buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy 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
