DAX bearish flag looking to continue the down trend for at least the short term.

DAX

SPX also starting to roll as global indices start to sell off contribution to the DAX bearish possibility. 

DAX

 

Key Points:

  • Daily – Below 50 EMA
  • Daily – Targeting Trend line or 200 EMA
  • Below 50 EMA
  • Below 200 EMA
  • Flag pattern for break out
  • SPX futures bearish

 

 

Key Levels:

Support – 12680, 12535

Resistance – 50 EMA, 200 EMA, 12795

 

Entry Zone:

Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.

Optimal Entry – 12770

Supporting Entry – 12750 – Break of flag

 

Candle Reversals for entry

  • Bearish Shooting Star
  • Bearish Engulfing
  • Bearish Dark Cloud Cover

Bearish Candlesticks

The Risk:

As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.

If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.

 

IF: Price breaks above 12851 and violates 50 EMA – this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.

 

Reward / Reward Targets:

Optimal Entry 12770 – Target 1 12795 = 3x Reward to Risk

Supporting Entry 12750 – Target 1 12795 = 2.5x Reward to Risk