Support and Resistance on the DAX: Monthly Levels, Weekly Opportunities

Most traders treat indices as something exotic: different spreads, different sessions, different personality. The whole point of this lesson is to kill that illusion. The DAX (DE30) is just another market built out of candlesticks, and the same support-resistance framework that works on FX will happily drive long-term swings here as well. The focus is not on intraday noise or fancy indicators. It’s on one clean idea: let the monthly and weekly candles define the “real” levels, then use those levels to time reversals and continuations with brutal simplicity.

Market Context & Setup

The instrument is DE30, the German DAX index, viewed first on the monthly chart and then drilled down to the weekly for the internals. A few key points about the environment

Instrument specifics: The DAX has unusual spreads at certain hours, but structurally it is no different from a currency pair. Highs, lows, swings, and retracements behave the same way.
Higher-timeframe trend: The chart shows a long sequence of swings: high → low → lower high → lower low in the earlier phase, then eventually a major upside break that launches a powerful trend.
Major turning zone: One particular monthly high makes a fresh low afterwards. That high becomes the reference resistance. If price can break and close above it, the down-leg is finished and the market is ready for a new leg higher.
ADR and momentum: The dashboard shows huge average ranges and strong momentum on the RSI Histo. When the 20-level and the zero line give way with a big expansion in bars, the move is driven by genuine order-flow, not random chop.

From this context, the job is straightforward

Let the monthly candles tell you which prior highs matter.
Mark those highs as horizontal resistance levels.
Once a level is broken and closed through, expect a retest from the other side.
Use the weekly chart to trade that retest and the continuation into the next “gap” between levels.

Core Tools Used

1. Monthly Swing Structure (“singing the song”)

Darren’s basic language for trend is the sequence of candle swings

High → Low → Lower High → Lower Low in a down-trend
Low → High → Higher Low → Higher High in an up-trend.

On the DAX monthly chart he reads this sequence bar by bar, almost like a rhythm. The last high that leads to a new low is the swing where sellers proved themselves. That high is promoted to a resistance level. Why it matters:
That swing high is where big players last defended their position. If price later breaks and closes above it, their defence failed. Structure has flipped.

2. Horizontal Support/Resistance Levels from Monthly Candles

Instead of drawing dozens of minor lines, he marks a small set of significant monthly highs

Highs that clearly led to a substantial drop afterwards.
When multiple highs are stacked close together, he chooses the highest one as the decisive resistance.

This automatically gives you

A clean map of major resistance bands above price.
Clear “gaps” between those levels, which become realistic targets once one level is broken.

On the DAX chart, a cluster of monthly highs stack around a big psychological area. Price eventually powers through that cluster with a huge green candle. That whole zone now flips into potential support on any deep pullback.

3. Break-and-Close Logic

Wicks don’t count. The candle has to break and close through the level to validate it

A wick through resistance that closes back below is just a test, not a breakout.
A solid close above the line shows genuine commitment from buyers.

On the monthly DAX move, there is a candle that spikes into resistance but fails to close through it. That is ignored as continuation; only the later candle that closes decisively above is treated as the true break.

4. Retest: Old Resistance → New Support

This is the core message of the lesson. Once a monthly resistance is cleanly broken, the market very often

Trends away from the level.
Then swings back down to retest that broken level from above.

That retest is where

Long-term traders can build positions with wide stops.
Scalpers can hunt lower-timeframe reversals in the direction of the dominant trend.

On the DAX weekly chart, after the big monthly breakout, price slides back into that old resistance area. The weekly candles stall, flickering around the horizontal line, and then push up again. That weekly pullback is the tradable “internals” of the monthly retest.

5. Weekly Internals of the Monthly Candle

Dropping from MN to W1, you can see inside the big reversal candle

A smaller sequence of highs and lows forming its own mini trend.
Local descending or ascending trend lines connecting these swings.

Darren’s way of drawing trendlines is pragmatic

Connect highs that generate lower lows for a down-trend line.
Connect lows that generate higher highs for an up-trend line.
Once the line is broken and closed through, it becomes fresh resistance or support.

This gives extra confirmation at the retest: the horizontal level and the broken trendline often align, adding confluence.

6. RSI Histo as Momentum Context

Below the chart, RSI Histo bars flip from deep negative to strong positive as the big breakout unfolds. Darren doesn’t need delicate divergences here; he just cares that

Momentum is expanding when the level breaks.
Momentum shrinks or flips around the retest area, showing exhaustion of the counter-move.

It’s a simple filter: don’t fade a level while RSI Histo is screaming in the direction of the breakout; wait until it calms down and then trade with the main trend from the retest.

Trade Examples on the DAX

Example 1 – The Monthly Break and Weekly Retest

Identify the monthly resistance
- On MN, mark the last clear swing high that produced a new low.
- That high becomes your resistance line.
Wait for a decisive breakout
- Candles probe the level a few times.
- Eventually one monthly candle closes clearly above it, with strong green body and RSI Histo pushing through the 20/zero region.
Project the next target
- Look left again and mark the next higher monthly high as the next resistance.
- The gap between current price and that upper level is your “airspace” for a trend leg.
Drop to weekly for entries
- On W1, you see a pullback that drives price back down toward the broken monthly level.
- As the weekly candles tag that line and stall, short-term momentum on RSI Histo cools.
Trigger logic
- Wait for the weekly swing sequence to flip: low → high → higher low → higher high closing back above the level.
- If you’re a position trader, that weekly higher-low against the monthly level is your long.
- If you’re a scalper, you can break it down further (H4/H1) and trade the intraday 2B/3CR reversals that form off that level.
Exit areas
- First target: the prior swing high on weekly.
- Extended target: the next monthly resistance above – the one you marked from the left-hand side.

This is a textbook “old resistance becomes new support” sequence, just stretched over months instead of minutes.

Practical Rules & Checklist

Draw monthly support/resistance only on swing highs and lows that clearly led to significant moves. Ignore the tiny noise.
When several highs are stacked together, pick the highest one as the meaningful resistance to break and close through.
Treat a level as broken only when the candle closes beyond it, not when a wick briefly pierces it.
After a clean break, expect a retest. Plan for it. The first decisive retest is often the best risk-reward.
Use the weekly chart to read the internals of the monthly move and to time entries after the retest.
Let RSI Histo confirm momentum: don’t fade the breakout while it’s exploding; focus on the pullback once momentum relaxes.
Never build a long position into a ceiling of untested monthly resistance sitting just a short distance above price. Know where the next level is.
Always assume that between two monthly levels there will be retracements. Don’t chase; wait for the pullback inside that zone.
Keep your chart clean: a few precise levels are more powerful than twenty random lines.

Darren’s Mindset

The key psychological point is that indices are not special. Spreads are quirky, tick values are different, but the behaviour of price around properly chosen levels is identical to EURUSD or GBPJPY. That mindset stops you from reinventing your method every time you change instrument. He’s also explicit about avoiding guru culture. Webinar rooms full of people screaming about thousands of pips are noise. The market doesn’t care how excited a chatroom is; it cares about where price has previously turned and where it has clean space to travel next. The monthly high that produced a new low is more important than any “signal service.” Finally, there is discipline in accepting that big levels sit on slow timeframes. A monthly breakout and retest can take months to complete. If you are impatient, you’ll chase into the middle of nowhere and then blame the instrument. If you respect the structure, you get a week-long move in your favour with the wind of the higher timeframe at your back.

How to Apply This on Other Indices

You can apply the same blueprint to any index or major instrument

Start on the monthly chart and mark the major swing highs and lows that led to decisive moves.
Reduce the clutter by only keeping the most significant levels and always taking the higher level when two are close.
Wait for a break and close through one of those levels, then plan for the retest from the other side.
Drop to weekly (and, if you like, H4/H1) to read the internals and time entries using your usual reversal triggers (2B, 3-candle reversals, RSI Histo shifts).
Target the next monthly level and be comfortable with leaving runners only when there is clear “airspace” to that level.

Strip away the noise, trust the levels drawn from the biggest candles, and let indices prove to you that support and resistance is a universal language, not an FX-only trick.

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