Jump to content

DAX and CAC Technical Outlook: Big Gaps Bring Support into Play


Recommended Posts

DAX/CAC TECHNICAL HIGHLIGHTS:

  • DAX gap down has major support in focus.
  • CAC gap also has trend-line in play, but less significant.

DAX and CAC Technical Outlook: Big Gaps Bring Support into Play

DAX AND CAC TECHNICAL OUTLOOK: BIG GAPS BRING SUPPORT INTO PLAY

Global stock markets are taking it on the chin today as pandemic news hits the tape. This has two of the most important European indices testing support to end the week. The DAX is down nearly 3% into a series of support levels.

The 200-day moving average is currently at 15383 and two slopes/trend-lines are also in confluence. One line runs up from the March low and the other from a low created in November of last year. This confluent area of trend support makes the gap into it especially interesting.

This could be a significant buy the dip opportunity for would-be longs if support can hold. Seeing the big gap lower maintain and the price of the DAX closing significantly higher than the open could see a bottom get forged, at least in the near-term.

Would-be longs may want to use today’s low at 15282 as a backstop with the first upside target set at a gap-fill up to 15917.

DAX DAILY CHART

dax daily chart

DAX Chart by TradingView

The CAC is down well over 3% at the time of this writing and also gapping into trend support. It’s only one line of support so it’s not as meaningful as the DAX, but nevertheless it is support. If the German counterpart holds its more meaningful levels and rallies, then the CAC should as well.

The low of today is worthy of using as a backstop next week in the event we see the current bid off the lows hold; that levels clocks in at 6736. The first target is a gap-fill up to 7075, followed by the record high at 7181.

CAC DAILY CHART

cac daily chart

CAC 40 Chart by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

 

Written by Paul Robinson, Market Analyst, 26th November 2021. DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Risk averse ways of earning always seem like good opportunities to earn some good bucks in the Crypto Space.  Certain platforms have taken it upon themselves to bring up worthwhile ways of giving users latitude to earn.  Bitget in its usual manner have brought forth an event to let users earn just by staking ETH. The APR is really Juicy, It is about 20%.  The event is exclusively for African new sign-ups. It seems like one to participate in for the newbies. Participating is relatively simple, you just need to navigate to platform's earn product and choose the corresponding product to stake and earn passively without necessarily risking anything.
    • Of course, the CEO is important, but today the role of the media is huge.  CZ has been known since 2017, but no one knows Richard Teng now. Even if a survey was conducted, Binance's CEO would still be defined as CZ by people.  Stock market confidence comes first. This is why Binance's SAFU security fund stands out and today Binance has 193 million users.
    • “FOMO” is the abbreviation of the initials of the words Fear of Missing Out in English. The English expression Fomo means "fear of missing an opportunity". “FOMO”, which we frequently encounter in the cryptocurrency world, is a term used to avoid regret. People who invest in cryptocurrencies have experienced this fear at least once. This effect affects everyone, from professionals to amateur helpers. To the question of what is fomo in the stock market, fomo is related to social media, stock market, cryptocurrency world, etc. We must say that it has various effects in various fields. In the cryptocurrency world, buying and selling transactions continue 24/7. Increases and decreases may continue at any time of the day. There are some factors that cause the FOMO effect in the cryptocurrency exchange. These factors; Greed Anxiety Impatience It can be listed as excitement. Investors watching the cryptocurrency they want to invest in are waiting for a decline opportunity. Sudden changes in opportunities in the cryptocurrency world cause investors to change their decisions. Investors who see opportunities increase are disappointed when positions are opened in a hurry and declines begin. In 2017, a recent example of FOMO, investors bought cryptocurrencies at high prices and incurred losses. Those who bought crypto currencies in large amounts experienced losses. The Fomo effect also has an individual nature. Individuals may experience the fomo effect for their personal investments. Fomo is not just a mass urge. FOMO occurs as emotional behavior rather than rational thoughts. One of the simplest examples is that it quickly pushes investors to the thought that motivates the person, such as "those who have cryptocurrency live a luxurious life." FOMO, which pushes towards irrational behavior, psychologically causes rapid action. In order to avoid losses, investments are made based on concrete information and graphics, not on attractive stocks. How to Deal with the Feeling of Fomo? People who make their own plans and research the markets they will enter in advance become conscious and follow the markets. Improving themselves, exploring hobbies, and becoming calm will reduce the effects of fomo. Balancing the fomo causes you to buy cryptocurrencies, not to make hasty decisions, and to perceive what is happening around you as it is. Cryptocurrency buyers need to be able to make rational decisions. Investments may take shape with FOMO disease. While trying to take advantage of the opportunities offered by other investors, you may encounter large losses. Decisions made with emotional motivation lie behind untimely investments. Fear of Missing Out on High Earnings It is the feeling felt by investors who rush to purchase the asset for fear of missing a profit opportunity.  When there are strong emotions, too many people have FOMO, which can cause parabolic price movements. We should mention that crypto money fomo causes great losses.  Investors competing for seats and switching from one asset to another often signals that the fomo effect is increasing. Extreme market conditions can change the general rules of the market. Buying cryptocurrencies based solely on increasing prices without doing research, reading charts, or technical analysis is an indication that we are caught up in FOMO.
×
×
  • Create New...
us