A potential hammer candlestick for the Dax 40 on the weekly.

Taking a look at the Dax40 as the German index has retraced by 6.3% since July’s all-time high of 16,532, currently, the index is trading at around 15,473. Looking at the chart from a technical aspect, and based on the weekly timeframe, we can see that the index tested the support along the 50-day moving average of 15,303 and actually dipped below it reaching a level of 15,132. But now it has bounced back and what looks like a hammer candlestick is forming. A hammer candlestick doji usually can indicate a bullish signal, perhaps some consolidation around current levels. However, this is not guaranteed. If this were the case, then the Dax would face resistance at 15,656 and then at 15,709. A break above 15,709 could see a rise higher testing the previous 20-day MA support which would then act as resistance (currently reading 15,918). The key support now is once again the 50-day MA, a break and close below may indicate that the Dax will continue lower with the following key support along the 100-day MA (14,733). Looking at the technical indicators, the MACD is still negative but volume has slightly lowered and the RSI is neutral as it reads 46. So the signals are a little mixed for the time being.