Technical Analysis – DayTradeIdeas
Daily Technical Analysis is provided by Jason Sen of Day Trade Ideas, who has been day trading since the late 1980’s. Jason has been a contributor of Traders Summit since the beginning. He primarily focuses on providing technical analysis of the financial markets, including stock chart patterns, Forex and Metals setups, and other useful technical analysis.
Dax 40 June opened higher after the holiday weekend…it looked like bulls remained in full control. However prices collapsed very quickly & a bearish engulfing candle was posted on the 1 hour chart.
This was our first warning.
Then a bearish engulfing candle was posted on the 4 hour chart.
This was our second warning.
FTSE 100 June does still appears to have a rounding top, with a new low for the week on Friday and another new low yesterday. Note yesterday’s bearish engulfing candle on the daily chart, which adds to the more negative outlook.
Today’s Analysis.
Dax June almost posted a bearish engulfing candle on the daily chart but we did not break the low of Friday’s session. However we were only 11 ticks away & we did close at the low of the day so it’s good enough to me to act as a sell signal. Note that if we close this week below last week’s low of 15800 we have a bearish engulfing candle on the weekly chart too. So a break below 15770 should be a sell signal for today. A break below the early March high at 15720 should adds pressure to the downside & a break below the February high at 15705 should do the same so we can take a break below 15700 to be the next sell signal.
Next target is 15550.
If we hold on to 15800 we remain in a broadening top pattern & we will wait for the breakout to the downside. I do not know how far a recovery could go today, but bear in mind that we do have a significant bull trap, with anyone who has entered a long position over the past 2 or 3 weeks waking up to a losing position this morning. They may be keen to exit on a bounce today so I think gains are likely to be limited. Bulls need above yesterday’s high at 16126 to be rescued.
FTSE June rounding top appears to be playing out as the FTSE trends lower. Although we initially traded above Friday’s high, the index quickly collapsed to post a bearish engulfing candle on the daily chart.
Again, gains are likely to be limited with minor resistance at 7820/30 & strong resistance at 7860/70 Shorts need stops above 7900. There is support at 7770/50 & we did bounce from here yesterday. We could do so again today but eventually I think we will break lower (maybe not today, I cannot be sure). This should be a sell signal targeting 7670/50.
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Jason Sen, Director
https://www.daytradeideas.co.uk
20230503
