The German 30-stock index futures extended their week-long rally today on strong upside momentum that saw prices climbing above 9500. The weekly gains have driven the stochastics into overbought territory, indicating possible consolidation or profit taking in the near term. If prices continue to climb higher, they’re likely to find resistance at around 9620, which is a previous closing resistance and support level.
Looking at the MACD chart however, the upside bias has not been strong enough to form a bullish signal line crossover, suggesting that further gains are needed to shift the outlook to a bullish one. A break above the 50-day moving average and into the Ichimoku cloud would help achieve this. For now, the index is stuck in bear territory below the cloud and the descending moving averages.
A fresh downside move could see prices finding immediate support at 9300, while a break below the February 11 low of 8689 (a 15-month low) would put the index back on the downtrend that started in April 2015.
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