Germany 30 Technical: A potential minor corrective decline looms

• Short-term RSI momentum indicator has flashed out bullish exhaustion condition after 6 consecutive weekly positive closes.
• At the risk of minor corrective decline sequence below 16,910 key short-term resistance.
• Intermediate supports rest at 16,590 and 16,440.

This is a follow-up analysis of our prior report, “Germany 30 Technical: New intraday record high, short-term bullish trend intact” published on 6 December 2023. Click here for a recap.

The Germany 30 Index (a proxy for the DAX futures) has managed to soar towards the 16,780/850 resistance zone as highlighted in our last analysis and printed a fresh all-time high of 16,829 yesterday, 12 December.

Overall, the major uptrend phase from the October 2022 low of 11,795 remains intact with its major resistance zone at 17,780/18,170 (see Fig 1).

Fig 1: Germany 30 long-term secular trend as of 12 Dec 2023 (Source: TradingView, click to enlarge chart)

At risk of minor corrective decline after 6 consecutive weekly positive closes

Fig 2: Germany 30 minor short-term trend as of 12 Dec 2023 (Source: TradingView, click to enlarge chart)

In the shorter term, its medium-term uptrend phase in place since the 27 October 2023 low of 14,586 has reached overstretched conditions as it has recorded six consecutive weekly positive closes.

In addition, current price actions have almost reached the upper boundary of the medium-term ascending channel with a bearish divergence condition being flashed out by its hourly RSI momentum indicator at its overbought region yesterday, 11 December.

These observations suggest an increasing risk of an impending minor corrective decline sequence with 16,910 as a key short-term pivotal resistance and break down below 16,735 near-term support sees the next intermediate supports coming in at 16,590 and 16,440.

However, a clearance above 16,910 negates the bearish tone to expose the next intermediate resistance at 17,100.

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