DAX (DE40) has been trading within a Channel Up (green) since its 1W MA50 (red trend-line) market bottom and yesterday it formed a 4H Golden Cross. That is technically a bullish pattern but in the past 5 months, every such formation (3 in total) has been an indication of a market Top, thus a bearish signal.
More specifically, the most it took for DAX to form a top after a 4H Golden Cross within this time-frame, has been 4 days. And as you can see it's also been similar Channel Up patterns that peaked after this Cross, on an identical Lower Highs trend-line like the one that the index is about to test.
What's even more striking is that every sell-off that followed the Tops was exactly -5.15%. Identical on all 3 occasions. As a result, it is possible for DAX to decline as low as 23050 following the upcoming top. Since however the 1W MA50 is involved this time as a Support, you may want to book profits there earlier, around 23300, if you see it acting as a Support with strong buying pressure.
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More specifically, the most it took for DAX to form a top after a 4H Golden Cross within this time-frame, has been 4 days. And as you can see it's also been similar Channel Up patterns that peaked after this Cross, on an identical Lower Highs trend-line like the one that the index is about to test.
What's even more striking is that every sell-off that followed the Tops was exactly -5.15%. Identical on all 3 occasions. As a result, it is possible for DAX to decline as low as 23050 following the upcoming top. Since however the 1W MA50 is involved this time as a Support, you may want to book profits there earlier, around 23300, if you see it acting as a Support with strong buying pressure.
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** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. **
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🔥Automate my TradingView strategies with OneBullEx 🤖 Professional crypto bots • Risk-managed • No emotions 👉 Trade smarter on OneBullEx using my link: rebrand.ly/7b3792
For my Account Management & Signal services👉 rebrand.ly/azr2wfo
For my Account Management & Signal services👉 rebrand.ly/azr2wfo
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.