DAX Fails to Recover from Opening Plunge
James Chen June 30, 2015 12:08 AM
<p>June 29, 2015 – Germany 30, representing the benchmark DAX index, gapped down at the open of trading on Monday due to investors’ collective anxiety […]</p>
June 29, 2015 – Germany 30, representing the benchmark DAX index, gapped down at the open of trading on Monday due to investors’ collective anxiety regarding the developing financial crisis in Greece.
Shortly after hitting an intraday low of 10,857 in the first hour of trading on Monday, which approached recent support lows around the 10,800 level, the index attempted to stage a rebound. While more than half of the opening gap was filled by afternoon trading on this rebound, price action soon began to falter and retreat back down towards its lows.
From a broader perspective, the DAX is still trading within a downside correction from its record high around the 12,400 level this past April. After Monday morning’s drop, the index had traded down to more than 12% below its all-time high.
The latest rebound within this correction occurred in the past week, when the index climbed to a key downtrend line and resistance level around 11,650 before pulling back once again. That resistance level also represented the 50% retracement of the downside correction from April’s noted 12,400-area high down to mid-June’s noted 10,800-area low.
With any further turmoil emerging from Greece this week, the key downside level to watch would be this 10,800 support level. In the event of a sustained breach below this key level, the index could begin making its way further down towards support objectives at 10,500 and 10,100.
To the upside, the noted 11,650 level should continue to serve as strong resistance on any rebounds within the current downside correction.
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