Chartbook: DAX Chart: Signs of profit-taking and developing downside risks

Choppy trade around 24000 has given way to a fresh run to all-time highs above the 26000 Fibonacci projection,

with prices reaching 26618 before falling sharply to congestion around 25500.

Overbought weekly stochastics are unwinding and the weekly Tension Indicator is coming under pressure, highlighting a deterioration in sentiment and room for a deeper retracement into the coming weeks. A close beneath 25500 will open up further congestion around 25000, with room for continuation into multi-week congestion above 24000, where fresh consolidation is expected to appear. The monthly Tension Indicator and monthly stochastics are also coming under pressure, suggesting room for a later break and a deeper retracement.

The relative outperformance of German 10Y yields, following a multi-month neutral period, also highlights developing downside risks to equities.

Meanwhile, resistance is at 26000 and extends to the 26618 all time high of 28 August.

Deteriorating monthly studies and mixed/negative longer-term charts should limit any tests of this range in renewed selling interest.

However, a close above here, if seen, will improve sentiment and extend long-term gains initially towards the 28000 Fibonacci projection.