Black lines- bearish RSI divergence
Red line- expected path
Green line- support trend line
DAX index has been in a bullish trend since mid September when price was making a low around 11,800. Now trading around 15,700, short-term trend remains bullish with price making higher highs and higher lows. However there is a warning sign by the RSI that implies a weakening up trend for some time. The RSI has been making lower highs for several weeks now. The bearish RSI divergence suggests that we could see a reversal in the Daily chart soon. This is not a reversal signal. This is just a warning. Support by the green support trend line is found at 15,220. Upside potential is limited to a move towards 16,000. Our expectation is for price to reach the yellow rectangle and reverse. A break below the green trend line will confirm the start of the reversal.
