The German DAX started a move higher out of consolidation as 2015 began. What was running as a 3 Drives pattern failed in the last leg though and it started back lower. The Greek situation probably helped it continue lower in a channel illustrated in the chart below. So with the Greek bailout announcement and the move higher of the DAX out of the channel all is well right? Not so fast.
There are some signs that the worst may be over. The momentum indicators give some of them. The RSI is making a new high and rising. It is nearly into the bullish zone over 60, and at the highest level since the peak at 12390.75. But it is not yet in the bullish zone.
The MACD has crossed up and is rising too. A positive sign but the sign on the MACD is not positive, it is still below zero. Finally, the last 3 candlesticks in the price action took the price above the falling channel. But the gaps between the moves, and the shrinking candle size, capped off with a Hanging Man candlestick Monday give pause. These create an Advance block pattern, showing weakening strength or exhaustion.
A continuation would end the caution. Especially if it happens on a long body candle, and a move over 12000 again would seal the deal for a reversal. At that point you can look for an AB = CD pattern with a target to 14700. But lets not get ahead of ourselves. Monday was a positive day, but the downtrend killer.
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