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 December reached 14461, just 39 ticks from the next target & strong resistance at 14500/600.
We may have just seen a high for the incredible 1 and a half month, 550 tick short squeeze but this may present an excellent selling opportunity.
FTSE 100 December remarkably stable considering the madness in the US markets.
Remember when support is broken it usually acts as resistance & vice-versa.
Update daily by 06:00 GMT.
Dax December got very close to strong resistance at 14500/600. Shorts need stops above 14750. I think there is a good chance we have seen a high for the recovery yesterday & the bear trend will resume. The short squeeze was brutal & surely there must be very few speculative shorts left. The next move to the downside (if I am right) could be just as swift. Although we have no sell signal just yet, we are severely overbought in what I believe is still a bear trend.
Yesterday we hit the downside target of 14200 & reached 14142 before a bounce. First support at 14100/050 today. Longs could be risky. A break below 14000 targets 13850/800.
Gains are likely to be limited with first resistance at 14330/360. Shorts need stops above 14400.
FTSE December tested minor support at 7335/25 but over ran by 20 ticks. Expect strong support at 7270/60. Longs need stops below 7240. Minor resistance at 7430/40. A break higher targets 7480/90 & perhaps as far as the September high at 7515.
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Jason Sen, Director