The German 40 (DAX) is trading at 26,122.06 (-0.01%), essentially flat but holding just below its all-time-high territory after a strong, near-uninterrupted advance off the April low near 21,800. Price is comfortably above all three moving averages, with the 14-day (red, 26,239.44) sitting almost exactly at spot — meaning the index has been consolidating right at its fast average after the recent sharp rally rather than pulling back into it, a sign of underlying strength. The 50-day average (yellow, 25,505.92) and the steadily rising 200-day average (green, 24,586.98) are both well below price and trending upward, forming a clean bullish stack that confirms the longer-term uptrend is intact and accelerating. Immediate resistance sits at 26,240 — essentially the current high-water mark and the 14-day average level — with the psychological 27,000 round number as the next objective if the breakout continues. The stochastic momentum index is reading -7/+7, having just rolled over from a deeply overbought reading above 80 in mid-August; price has continued to grind sideways-to-higher while momentum has cooled sharply from its peak, which is a mild bearish divergence and suggests the index needs to digest recent gains before another leg higher is sustainable — this argues for some near-term caution even within the broader bullish structure. Support is layered at 25,506 (the 50-day average, which has acted as the pullback floor through this entire advance) and more significantly at 24,587 (the 200-day average), which represents the line in the sand for the longer-term trend. Given the momentum cooling despite price holding up, a sensible approach is to look for a shallow pullback toward 25,506 as a lower-risk entry rather than chasing strength at current levels, with a stop loss placed below 24,587 to protect against a trend change.

                                                            Daily Chart: Longer-Term Bias: Bullish

The German 40’s daily chart is in a clean, established uptrend: after basing through late 2025 and shaking out a sharp corrective decline into the March low near 22,000, the index has trended steadily higher, and price at 26,095.60 is now trading above all three moving averages — the 14-day (red, 26,244.16), the 50-day (yellow, 25,477.92), and the 200-day (green, 24,575.06) — a stacked bullish alignment where each shorter average sits above the next, confirming trend strength across multiple timeframes at once. The 200-day MA at 24,575 has been rising steadily since the spring and represents the broad support floor for the longer-term uptrend, while the 50-day at 25,478 has more recently caught up to price and is acting as the more immediate trend-following support during the current advance. Immediate resistance sits right at the recent swing high around 26,244, which price has been testing and probing over the last few sessions, with the psychologically significant 27,000 level as the next major upside target if the breakout extends. On the downside, a pullback would first find support at the 50-day MA near 25,478, with the 200-day MA at 24,575 as the deeper support in the event of a more meaningful correction. The Stochastic Momentum Index has pulled back sharply from an overbought extreme down to 4.70/19.95, and importantly this dip in momentum has occurred while price itself has only pulled back modestly from its highs rather than breaking down — a mild bearish divergence where momentum is cooling faster than price, which typically precedes a period of consolidation or a shallow pullback rather than a full trend reversal given the strength of the underlying MA structure. Given the still-intact uptrend and bullish MA stack, traders could look for continuation toward 27,000 on a resumption of momentum, with a stop loss placed below the 50-day MA around 25,300 to protect against a deeper corrective move.

Friday 21st August

The daily DAX chart remains constructive from a longer-term perspective, with price at 25,983.08 continuing to trade above both the 50-day moving average (yellow, 25,450.17) and the 200-day moving average (green, 24,562.78), the latter of which has been in a persistent uptrend since the spring and serves as the broad structural floor beneath this year’s advance. That said, price has recently slipped back below the 14-day moving average (red, 26,254.66), a level it had been trading above through the sharp August rally, and this loss of the shorter-term average is an early signal that the most recent leg higher is losing steam and consolidating rather than extending immediately. This is confirmed by the Stochastic Momentum Index, which has rolled over hard from overbought territory to 14.96/32.23, with the blue SMI line now sitting below the orange signal line — a bearish crossover that typically precedes further near-term softness or sideways chop even within an intact uptrend. Immediate resistance is the 26,255 zone (14-day average, and just below the recent swing high near 26,340), with a reclaim of that level needed to resume the push toward the psychological 26,600 area. On the downside, the 25,450 level (50-day average) is the first real test of this pullback’s severity, and a break there would put the longer-term 24,563 support (200-day average) back in focus. Traders holding longer-term bullish positions should use a stop below 24,563 to stay aligned with the primary trend, while shorter-term participants may want to wait for either a reclaim of 26,255 or a successful retest of 25,450 before adding fresh long exposure.

The 4-hour chart paints a clearer near-term bearish picture, with price at 25,983.58 now trading below both the 14-period moving average (red, 26,058.19) and the 50-period moving average (yellow, 26,288.00), while still holding above the 200-period average (green, 25,623.11) — a moving-average alignment that reflects a market correcting within a still-broader uptrend rather than one that has fully reversed. The recent break below the 14- and 50-period averages, after price had been riding above both through the sharp rally into the August highs, signals that short-term sellers have regained control, and this is reinforced by the Stochastic Momentum Index, which has plunged to a deeply oversold -65.36/-69.63 with the blue line still below the orange signal line, confirming active bearish momentum on this timeframe. That said, readings this extreme on the SMI often precede at least a short-term bounce or stabilization, so traders should watch for early signs of the oscillator curling back upward as a potential early warning that the near-term selling pressure is exhausting. Immediate resistance sits at 26,058 (14-period average), with a reclaim there needed to challenge the more significant 26,288 level (50-period average) that has capped every recovery attempt since the pullback began. On the support side, the 200-period average at 25,623 is the critical line in the sand — a decisive break below it would open the door to the 25,200 area, the last meaningful consolidation zone before this rally phase accelerated. Short-term traders leaning into the current bearish momentum should use a stop above 26,288, while those anticipating a bounce off oversold conditions near the 200-period average could look for a stop just below 25,200 to limit risk against a deeper breakdown.