Technical Analysis – GER 30 index set for a bearish correction after new record high

The German 30 index (cash) posted its first red candle after its seven-day-old bullish streak halted at a new record high of 15,364 on Tuesday.

The RSI and the Stochastics seem to have peaked within the overbought area too, justifying the recent pullback in the price. Despite that, the upward-sloping simple moving averages (SMAs) and the trading above the Ichimoku cloud keep embracing the broader positive trajectory in the market – of course as long as the price continues to fluctuate above 14,126.

In the short term, a close below 15,150, where the 20-period SMA is currently supporting the market on the four-hour chart, could pressure the index towards the 15,000 round-level. Moving lower, the 20-day SMA at 14,747 could next come to the rescue before a more aggressive downfall attempts to stabilize near the key 14,400 mark.

Should the price bounce on 15,150, the bulls will push harder to clear the 15,364 top with scope to claim the 15,500 psychological number.

Summarizing, the rally in the German 30 index seems to have reached a peak within the overbought area, though sellers may not take full control in the near term unless the price slides below 15,150.

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