GDAX DAX 40 (German 40) Technical Analysis & Trade Idea

20 Feb

GDAX DAX 40 (German 40) Technical Analysis & Trade Idea

The DAX 40's recent bullish surge reveals signs of exhaustion on the monthly and weekly charts. Lower timeframes suggest a manipulative price structure primed for a potential trend reversal.

Here's the breakdown:

- Overextension: Extended trends often succumb to corrections or shifts in direction. The DAX 40 appears ripe for such a move.
- Liquidity Engineering: The 4-hour and daily price action hints at manipulation. The downside breakout followed by a stop-loss raid indicates possible accumulation to fuel a bearish move.
- Reversal Pattern: This market behavior aligns with recurring reversal setups I've observed consistently throughout my trading experience.
Trade Idea

- Direction: Short (with the potential for significant downside)
- Timeframe: Expect bearish momentum through February and March.
- Monitor: Watch for validation on lower timeframes (e.g., a bearish break of the current range).
- Risk Management: Set appropriate stop-loss levels based on your risk tolerance.

Disclaimer

This analysis is for informational purposes and does not constitute financial advice. Before making any trades, perform your own in-depth research and exercise prudent risk management.