DAX Rally Overstretched? Initiating a Strategic Short PositionSince February 25, the DAX has surged by 7.24% without a meaningful pullback, suggesting potential overextension. Coupled with emerging bearish technical indicators and unfavorable economic fundamentals, this presents an opportunity for a short position.
Fundamental Analysis:
Germany’s economic landscape is currently facing several challenges:
• Economic Slowdown: The government has slashed its 2025 growth forecast to 0.3%, down from the previous 1.1%, citing trade tensions and domestic uncertainties.
• Industrial Strife: Major companies are implementing job cuts and factory closures to manage rising costs and global competition, leading to increased labor disputes and uncertainty over Germany’s manufacturing sector.
• Political Uncertainty: Upcoming European and local elections have intensified debates over economic policies and migration, contributing to market volatility and investor caution.
Trade Details:
• Entry: 22,611
• Stop-Loss: 23,000
• Target Zone: 21,800 - 21,600
• Partial Profits: To be taken at key support levels
The confluence of technical signals and economic headwinds suggests a potential correction in the DAX. This short trade aims to capitalize on the anticipated pullback, with risk managed through a well-placed stop-loss and planned profit-taking at identified support zones.
Next week will be critical for the Eurozone, with key economic data releases shaping market sentiment. Investors should particularly watch the PMI data on Friday, which could significantly impact expectations for the region’s economic trajectory.
Stay informed and trade responsibly.
Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.
Daxswing
GER40 swing sell idea(1:10-1:20RR)GER40. 18500, which is our level of interest(Quarterly VWAP + 0.786 fib drawn from all time high) has been quite important level this year. GER40 has been bullish for 11 days straight. This indicates an overextended market, with the possibility of a Weekly Head& Shoulders pattern forming around 18500. This is a 10-20% move that should happen in a couple of weeks, counting the recent volatility in the markets all around. Will update next week.
Fractals Trading Community,
Mei
Dax Jan 31 - Feb 1 UpdateSharing DAX updated from TTR
DAX had a perfect reversal candle, but still needs to confirm below 16855
We got a monthly inside candle close today.
Weekly has more room to the upside, but a double we have a potential double top formation here
We have a clear negative divergence on the daily level!
The DAX could be at (or near) a swing lowIndex futures held their ground overnight, and the US dollar's rally is showing signs of near-term exhaustion. And that indicates a subtle change in sentiment ahead of today's open.
The DAX found support at its 50day EMA on Wednesday, which is just above the 2021 high. Given a small-ranged bullish hammer formed alongside higher volume suggests a 'change in hands' between sellers to buyers, so we're on guard for a bounce.
Bulls could seek to enter within yesterday's range with a stop beneath the 2021 high and initially target gap resistance around 16,490 - a break above which brings 16,600 into focus for bulls.
However, as we suspect the US dollar is set to extend its gains after a pause in its rally and that equities are yet to make a decent retracement, we're anticipating another leg lower towards the support zone just above 16,000.
Don't give up on the DAX just yetYes, the DAX is clearly within an established downtrend on the daily chart. And its drawdown from its record high is relatively shallow at just -11.5% by historical standards - meaning we suspect further losses could be coming.
Yet its failure to break beneath the December high and March low has not gone unnoticed. And given it formed a bullish hammer around these key level with a mild bullish RSI divergence, we see the potential for some mean reversion over the near term.
Keep in mind that we have flash PMIs for the US and Europe today along with a speech from ECB President Lagarde, US GDP, PCE inflation and a Jerome Powell speech also in focus this week. And that leaves plenty of room for volatility for global markets.
Dax40 Long turned down, but first support can be nearDax has been trading higher since October 2022 but five waves up from that low suggested that bulls are done for now and that correction is in play. In fact, we have seen a nice reversal down recently, through the trendline support on the 4h chart so the corrective phase is here, but with three waves down from the top, we may start observing some of the support for wave (C). An interesting level for a new price stabilization can be at 15300-15400 area.
BIG SHORT ON THE DAXAs you can see from my track record, I am never wrong.
The DAX will sell off to 14100.
I have taken my trade at the very top.
Let us watch this unfold.
Cheers
DAX H4: Too early for bears to enter? Fed did it again.Bears in Twitter start to ask themselves whether they were all wrong or they were too early to bet against the market after the Fed was hawkish-but-not-too-hawkish in yesterday's meeting. DAX is a heavily automotive, banks and other cyclic assets weighted European index. Europe has performed better than America, but if ECB decides to implement an even more hawkish strategy than that of the Fed, those "better European gains" will vanish relatively soon. That is why, together with the current economic, political and social-unrest context; I am beginning to feel bearish on DAX and CAC. DAX could be shaping a H&S pattern the next days that could end up pretty bad if inflation does not calm down, ECB continues to raise rates and unemployment increases.
Therefore, my prediction is that DAX will not reach ATHs and stay around 15580-16250 to drop later on to 11350-13350.
Could there be again a Head and Shoulders on its way?
DAX FUTURES DE30 LONG IDEA Hello traders,
this is my analysis for CURRENCYCOM:DE30 and the way I will operate.
Post your idea/analysis below for discussion.
Thank you all for your support.
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ger30,DAX,DAX30, short this is a short as in it really near all time high and soon going to break because of global reasoner that are going in the upcoming time.
in a bigger picture it is following a very high push upwards so might as well go for another high records but it closely follows Dow. the new York exchange and hence can be highly volatile due to the pandemic .
overall many retailers want a short as it has been a very strong upwards sueeze but to cannot fight against the banks youll have to always respect the big sharks in the market