The German 30-share index (GER30) continued to slide for a third-day on Thursday as it fell back into the Ichimoku cloud. The index has been on a downward path after reaching a record high of 12433.40 on April 13. It managed to break out of the upper channel on July 13, finding resistance around the 11800 level.
The near-term indicators are looking bearish with RSI falling towards 50 and the stochastics approaching 20. The 23.6% of the Fibonacci retracement level of the upleg from October 2014-April 2015 is providing support at 11465.19. A break below this level would take it back into the downtrend channel.
But with the index still above the 200-day moving average and the tenkan-sen line crossing above the kijun-sen line, there is some upside momentum to push the index above the April 13 high. Failure to break above this level means the index is likely to consolidate in the medium term as long as it holds above the 200-day moving average.
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