Technical Analysis – GER 30 index denied further advances above MAs

Anthony Charalambous, XM Investment Research Desk

Germany 30 index (Cash) was deprived of additional gains after the index shot above the 100-period simple moving average (SMA), escaping a region where the SMAs had converged. The price appears to have retreated from a limiting level in-line with the upper surface of the Ichimoku cloud around 13,047.

Looking at the relatively flattened SMAs, they too reflect the short-term neutral mode that the price has adopted, despite the sudden strength in the index. The Ichimoku lines have stalled their rise and the positive momentum in the short-term oscillators has also weakened. The MACD seems frail above its red signal line in the positive zone, while the RSI is falling below the 70 mark.

To the downside, the index faces a zone of congested support from the horizontal SMAs, (12,784-12,618), ahead of the low of 12,515. Should the price deteriorate under the cloud and 12,515 low, sellers may target the critical trough of 12,208 before diving for the 12,081 barrier and 11,956 foundation level.

If buying interest picks up, initial resistance may come from the 13,047 level ahead of the 13,217 peak and the top of 13,315. Surpassing these obstacles, the price may rally towards the 13,572 high from February 21 before turning the focus towards the all-time high of 13,826.27.

Summarizing, the short-term bias looks neutral-to-bullish above the SMAs and a break above 13,047 or below 12,515 may reveal the succeeding direction.