Jump to content

DAX 40 and CAC 40 Technical Outlook: In Face-off with Resistance


Recommended Posts

DAX/CAC TECHNICAL HIGHLIGHTS:

  • DAX hit a big level and is currently reversing
  • CAC is turning down off after test of 200-day MA

DAX 40 and CAC 40 Technical Outlook: In Face-off with Resistance

DAX 40 AND CAC 40 TECHNICAL OUTLOOK: IN FACE-OFF WITH RESISTANCE

After a massive recovery the DAX is finally running into an area of resistance that it is finding formidable to overcome. The area from just over 14800 to 15100 is a big one, and with the market reversing the other day at big resistance, a retracement, or sideways period at best, is to be expected.

There is short-term support at the top of a range created mid-month at 14553. The DAX may look to hold this spot and retest the aforementioned resistance zone, but given how far we have come in such a short period of time we may see more downside towards 14109 or worse.

For now, the trading outlook is not favorable for longs given overhead resistance and overbought conditions. It could become a bit of a choppy market with a downward bias. Another failure up around 14800/900 could offer up a good opportunity for would-be shorts to play this scenario.

 

DAX DAILY CHART

dax daily chart

DAX Chart by TradingView

The CAC snuck above horizontal resistance dating to December at 6747, but quickly found it difficult to climb above the 200-day moving average only 30 handles higher. The smallish reversal lower could continue in the near-term.

There is some support around 6655 that could keep price bobbling between support and resistance. It is seen as taking a little time of digestion before the CAC can reassert itself towards higher levels. If we do see the recent high at 6829 taken out, watch the trend-line off the Jan high.

Overall, though, the outlook for the CAC is naturally similar to that of the DAX, but the CAC remains a bit more bullish in the absence of major resistance, while the DAX remains seen as the better short given its major levels to overcome.

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. 31st March 2022. 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
  • General Statistics

    • Total Topics
      21,176
    • Total Posts
      90,698
    • Total Members
      41,284
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    ThinnyFX
    Joined 29/01/23 09:53
  • Posts

    • Capital, win loss ratio. If you have a trading edge and you can consistently win 50% of your trades, so your winning 5 trades out of 10. So if your risking 1% of your capital per trade, out of your 10 trades 5 would be losers, so that’s 5% loss and realistically out of the 5 winning trades, some would make small profits, some break even and 1, 2 or 3 could run nicely IF you can let your profits run, basically your making money out of 2 trades out of the 10 trades (80/20 Rule Pareto principle) So a $20,000 acct risking 1% is $200 per trade, this will keep the trader with his trade risk based on being able to win 50% of his trades. A long term trend trader can win with 30% wining trade. Basically you need to know your numbers. Rgds Pete
    • Investing in stocks can be a great way to grow your wealth over time. However, there are different approaches that investors can take when choosing which stocks to buy. Two of the most popular approaches are growth investing and value investing. Growth Investing Growth investing is an investment strategy that focuses on buying stocks of companies that are expected to grow at a faster rate than the overall market. These companies are often in industries that are growing quickly, such as technology or healthcare. Investors who use this approach believe that these companies will be able to generate higher profits in the future, which will lead to higher stock prices. One of the main advantages of growth investing is that it can potentially provide higher returns than the overall market. However, it is also riskier than other investment strategies, as these companies often have higher valuations and more volatile stock prices. Value Investing Value investing is an investment strategy that focuses on buying stocks of companies that are undervalued by the market. These companies may be in industries that are out of favour or have recently experienced challenges, but they have strong fundamentals and a history of profitability. Investors who use this approach believe that these companies are undervalued and that their true value will be recognized in the future, leading to higher stock prices. One of the main advantages of value investing is that it can potentially provide lower risk than growth investing. However, it may also provide lower returns in the long run, as these companies may not have the same growth potential as companies in the growth investing category. Comparing Growth and Value Investing Growth and value investing are two different approaches to stock investing, each with its own advantages and disadvantages. Growth investing can potentially provide higher returns but is riskier, while value investing can provide lower risk but potentially lower returns. An investor may choose one approach or a combination of both. A portfolio that contains a mix of growth and value stocks can provide a balance of potential returns and risk. Conclusion Both growth investing and value investing can be effective ways to invest in stocks. The key is to understand the potential risks and rewards of each approach and to choose the one that aligns with your investment goals and risk tolerance. Analyst Peter Mathers TradingLounge™ 
    • I am a beginner, and I must say, there are a lot of rules to the trading game that one must abide by if they want to be successful.   Here, the writer mentions several basic rules for day vs swing trading.  However, I find that often times, the reasoning for these rules is not as  obvious for a beginner as it may be for an expert.   The 'why' factor if I may. For example, why must you have a large capital to trade with as a day trader? Because your positions must be large so that a small change in price will be augmented and turned into a large profit. Also, with such high risk, the margin will be specially high, given the trader is taking up large positions at a time.  Without a large amount of capital, positions may be forced to close due to funds being below margin requirements.  When this happens, you can expect to lose tons of cash, fast.  I learned the hard way. All the best, David Franco      
×
×
  • Create New...