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    Technical Analysis DE30 : 2015-05-27

    Germany outruns eurozone countries, Grexit risk remains

    Today we consider the German DAX 30 index CFD, nominated in the euros. In NetTradeX trading platform it is marked as DE30. On Wednesday concerns about the Greek default eased, so the index showed an increase. The government and creditors progressed in debt negotiations. To be noted, economic recovery in Eurozone almost graded up with Germnany due to the quantitative easing program by ECB. The estimated growth in German GDP was 1.1% in the first quarter, while eurozone GDP added 1%. However, Germany outruns other EU countries on a number of indicators. For example, in April the export surplus in Germany made €23.4bln, as compared to €19.3 bln in the whole eurozone. Thus, all other 18 countries account only for €4.1bln. Consequently, we do not rule out that DE30 may show better dynamics in the future than other European indices. Since the beginning of the year it has expanded 20%, falling behind French, Italian, Portuguese and some other indices.

    PCI

    On the daily chart DE30 has been in the uptrend. It has recently accomplished a pullback after showing ascending divergence, according to RSI-Bars. The chart is above the 200-day Moving Average. Parabolic gives buying signals. MACD bars are below the zero and signal lines, which indicates a bullish momentum as well. RSI has moved above 50. While having a positive slope, Bollinger Bands have started contracting, which may imply low volatility. It is worth mentioning that the risk of Grexit remains. This is an essential factor to be considered that is why it would be reasonable to place two or more opposite pending orders. If the fractal high is reached at 12058, a bullish movement may continue. If the price goes below Parabolic, the latest fractal and Bollinger line 11212, a bearish momentum will prevail. When one of the orders is activated, the other can be canceled, since the market has chosen the direction. After pending order activation, the stop loss is to be moved every four hours to the next fractal high (short position) or fractal low (long position), following Parabolic signals. The most careful traders can switch to the H4 time frame and place a stop loss, moving it after the trend. Thus, we are changing the probable profit/loss ratio to the breakeven point.

     

    Position Sell
    Sell stop below 11212
    Stop loss above 12058

     

     

    Position Buy
    Buy stop above 12058
    Stop loss below 11212

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