Two Trades To Watch: Dax, Nasdaq

Dax rises on global recovery hopes. Nasdaq futures return to ascending channel after Amazon & Alphabet beat forecasts.

Charts (6)

Dax rises on global recovery optimism 

Stocks are on the rise amid optimism surrounding a huge US stimulus package and on vaccine rollout optimism.

As the global vaccination effort accelerates hopes of a strong economic recovery in Q2 onwards are gaining momentum.

German composite PMI final reading January expected to confirm 50.8.

Eurozone composite PMI final reading for January due in addition to Eurozone inflation which is expected to +0.5% MoM.

Dax technical analysis

The DAX has been trending lower since early January, before rebounding off 13270.

The Dax price has extended its recovery through the 50 and 100 sma on the 4 hour chart and has also moved above the descending trend line negating the near term bearish trend. 

The RSI is supportive of further upside, sitting over 50 and pointing northwards but still below overbought territory.

Immediate resistance is seen at 14000 and a move above this level could see the Dax gain traction towards its all time high of 14137.

On the flip side, immediate support can be seen at 13825/00 the trend line resistance turned support & 100 sma. A break back below this level could open the door to 13700 confirming the bearish outlook.

Nasdaq futures advance after Amazon & Alphabet results

The Nasdaq resumed its upward trajectory as the focus shifts back to earnings and away from the retail trader short squeeze frenzy of last week.

Alphabet (GOOGL) and Amazon (AMZN) posted impressive Q4 earnings besting on both the top & bottom line, rising 7.7% and 1.3% respectively helping to lift Nasdaq futures.

US vaccination drive is picking up pace with 32.2 million people vaccinated.

US ADP data coming up

Nasdaq technical analysis

After rebounding off its 50 sma on the daily chart, the Nasdaq (QQQ, NDX) has returned to its ascending channel. The bull trend remains firmly intact and is well supported by the 50 sma. The RSI is also in bullish territory and indicative of further gains at 62.

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