See the chart for engulfing candle day trade strategy. Risk is 1 to 1 so it requires more winning trades then losing.
A manual back test of the strategy looks impressive over the last couple of months.
i) The candle on 06/11/2014 made the high of this move.
ii) The candle on 12/11/2014 closed below the low of the candle in (i).
iii) This reverse candle formation appeared right at the bottom of the Kumo Cloud, which typically acts as a Resistance area.
iv) A re test of the previous low is expected at 8406.
v) the dashed pink lines are the immediate support...
If Dax shows a sign of reversal at the PRZ, go short, targeting 9080, initially and lower.
Trading above 9400 will increase the potential of Dax going higher. At the moment I am more short biased.
If the price doesn't succeed to break the cloud, we might see a retest of 8920 level (at least) and 8400, 8110, subsequently.
i) Rejection from daily Kumo Cloud
ii) 9400 was a strong Resistance
Originally prepared on 21st October 2014: German DAX - 2 Weekly
The German DAX chart below is 2 weekly. This is to show bigger picture but not miss the finer details that happens with Monthly. We do not have price data on the chart prior to 1991. However, it is fair to conclude that the major bullish cycle that commenced in 1982 on other major world indices...
After breaking 8900 important resistance zone last week DAX recover compleet from the 8400 resistance.
The oversold RSI bring DAX up again.
DAX had a false breakout from 8900 , and DAX return back in 8900 supportzone.
The new earnings season bring good results mostly , and DAX will recover to make a positive balance for 2014.
We wait for second test from the...
DAX is in the process of a short term relief rally to upside. The levels of resistance are defined on the weekly chart. Bullish divergence has been seen on the daily RSI. Looking for the RSI on 90 minute to test the 45-period Moving average to go long.
DAX is now for second day under the very important 8900 support zone area.
If DAX in the next day not return to 8900 zone , we can confirm the bearish
outlook.
Summarized :
bear:
DAX break his long trendline 2011
DAX starting making lower lows
The very strong 8900 supportzone turning in heavy resistance zone.
negative for bear :
oversold RSI
If we have a false...
Trigger for a Short would be a break of last candle low circa 8780. Initial wave of selling has concluded; Double Smoothed Stochastic fast value already broke 50 line week of August 18, typical bullish reaction ensued, slow value completed crossing of 50 week of September 22, this completed the first wave of selling a strong market. Price has broken and closed...
Waiting to open a long position when the 100% extension will be reached at 8770/8750 area.
SL at 8450 and first target at 9030 area in order to create a risk free position. Final target is new highs at 10500 area.
If it breaks the neckline and confirms the head & shoulders top,
you can expect another leg down to 8136 - 7700 (maybe even this year).
If no breakdown occurs and 8902 holds, I expect a decent bounce to 9500+
Also, interesting ratios between the last 4 waves indicate good downside potential.
Dax is back to 9100 support level.
fourth time in 2014 DAX is around 9100 level.
DAX is bouncing in trading channel 9600 and 9100
break to 8900 and lower bring DAX in negative perspective next month's
if 9100 or 8900 hold we go back to 9800 zone again
