DAX remains at the back foot and opened lower on Thursday after previous day’s strong fall.
Extension of pullback from fresh record high at 12410 (posted on 03 Apr) hit the mid-point of 11878/12410 upleg and sees risk of deeper pullback on cracking converged daily Tenkan-sen/ Kijun-sen lines (12176/12144) respectively.
Daily RSI that reversed from overbought territory is heading south and showing a plenty of space at the downside.
Close below daily Kijun-sen is seen as initial bearish signal to open a cluster of supports below that starts with 20SMA (12123) then Fibo 61.8% (12081) and 30 SMA (12065).
The move is seen as correction of broader uptrend since Feb 2016 low at 8695 and should be ideally contained between 12081/12036 zone (Fibo 61.8% / bull-trendline connecting 11459 and
11878 trough) to avoid deeper pullback that may extend below psychological 12000 support on violation of the latter points.
Another bearish signal is forming on reversal of RSI / slow stochastic from oversold territory on weekly chart that may signal stronger correction on break below 12000/11878 supports.
Resistance points lay at 12201 (session high), 12243 (Fibo 38.2% of current 1241/12141 downleg) that marks the upper pivot.
Res: 12201, 12243, 12275, 12307
Sup: 12144, 12123, 12081, 12036
