Dax - 3 White Soldiers If we look at the Dax for early August, 2 bullish overlapping weekly candlestick formations are apparent
1. Morningstar - Firstly price HAMMERS's a low at 17,000 , wicking the 3rd Standard Deviation Channel. We then have an extended range bullish candle move near 2 standard deviations , to complete the Morningstar.
2. Three White Soldiers - this last bullish candle and the following 2 , together are 3 white candles with successive HH and HL. The second candle in this formation actually gaps the first with the weekly open, adding impetus to the bullish move.
The Dax is at ATH with a price of 18948.60. It is still within the 2nd Standard Deviation Channel, and room to move up. The weekly RSI is printing 62. It reflects a buy signal, and it is a long way from oversold.
The Daily Chart shows price has entered the Supply Zone with strong conviction. This is the 4th test of this Zone. A higher probability exists for selling pressure to have abated by now.
IF we look at the VSA, Volume in the uptrend has been Average . There is no blow off. Furthermore, the last daily candle was below average. The Bulls with little volume, were able to move price easily up through this zone ( no selling pressure).
With 9 bullish daily candlesticks in a row, there has to be some retracement. It is likely to be small, probably some form of multiple Doji, narrow range candles.
Client Sentiment has 84% of traders net short. They are likely backing this retracement. A contrarian view suggests the index will rise.
Technically , there is conviction for the Dax to rise
