DAX technical levels seem terrifying

DAX technical analysis | Our expectations:

Medium-term broad consolidation and short-term downward movement. Breakout below the last two diagonals creates negative expectations for a new drop.

Gap in the direction of short-term downward movement reinforces the negative sentiment - short.

SMA50 and SMA200 in the bear formation - negative signal, although in consolidation this signal has less significance.

DeM Sequential counts up to 4 - additional negative signal.

Passing the price below the key short-term level of 12085 can trigger a strong bearish momentum.

Trading scenarios: Wait for the gap to be filled with a shorter stop between  30 to 50 points (more conservative) or entry after break below 12085 again with a short stop 30 to 50 points.

Fundamental: Investors caution due to uncertainty about the NAFTA agreement between Canada and the United States. The tension over the banking sector is an additional fact that will force the indices to head north.

Alternative Scenario: In case of a false break below 12085 and a strong pull up, we can look for long positions with a stop below the formed bottom of the false breakout.

Read more:

• US – Iran – Iraq tension remain the main driver of the stock market today
• How top market players on Wall St think 2020 will look like on financial markets
• Money Flow before the start of the new trading week
• Cincinnati Financial Corporation (CINF.US) -Opportunity for long positions
• Asia stocks gain as Fed signals no rate cuts in 2020