The Dax index has been consistently hitting lower highs and lower lows on the dialy and 4-hourly chart, and when viewing the stochastic oscillator, we can see some bullish divergence.

Yesterdays candle formation was a piercing line pattern, closing above the mid point of the previous days bearish candle, highlighting the potential for a further bullish move higher.

This combo provides an opportunity for a short term buy with a tight stop and sensible take profit level.

This is a reversal trade, which is going against a clear dominant downtrend, so if it doesn't move higher, then this trade idea will get stopped out. You can see how fast the Dax moves lower when it starts trending, so be sure to get out quick if this move up doesn't unfold.

Ger30 long bullish divergence trade

Ashley Jessen

May 10 2022

1