Checking in on Angela Merkel

Angela Merkel

We last checked in on our favorite Western European female President just before Thanksgiving here. At that time the German DAX was approaching a Potential Reversal Zone (PRZ) of a bearish Shark harmonic. What has happened since? Well her mood above gives a hint.

While technically, the price action of the DAX did not get to the PRZ at 10150 it came close enough for Technical Analysis. A reversal lower on December 8th started a cascade that touched a 50% retracement of the pattern on Tuesday. If the Index wanted to reverse back higher this would be a good spot to do it. But so would the secondary target at the 61.8% retracement lower at 9021.

dax

As for right now, the Hammer like candle Tuesday, with the real body inside the prior day, in Harami style adds weight to the potential for a reversal. So does the RSI turning back higher right at the edge of the bearish zone. Only the MACD is continuing top point lower.

And if it does continue higher now? Then there is a RSI Positive Reversal, as measured against the November 17th low. This would target a move to a new all-time high to at least 10150. Look for confirmation from a close over 9600 to give more confidence and then wish Ms. Merkel Merry Christmas.

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