Today, DAX managed to set new yearly high and this can be just the beginning. This week’s candle (yellow) is breaking a very important resistance, which for technical traders can be considered as a strong buy signal.
The resistance, which I am talking about is the upper line of the symmetric triangle pattern (blue). This kind of breakouts are usually very strong and should not be ignored by traders. Especially, when the upper line of the triangle, is in the same time the neckline of the inverse head and shoulders pattern (orange). Yes, that is right. The massive correction that lasted for almost two years, is a well known iH&S formation.
If after seeing this, you are eager to open a long position, we are obligated to remind you that weekly candle is still in the process of creation. So far, so good but it is Thursday and a lot can happen till Friday evening. Once the candle will be created and the weekly close will be near yearly highs – the buy signal will emerge. In my opinion, chances for that are significant.
This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory
This article was originally posted on FX Empire
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