* DAX up 9 percent in 2 weeks, up 17 percent since mid-March
* Momentum oscillators show index as 'overbought'
* Three gaps left open; 1/3 retracement a good entry point
By Blaise Robinson
PARIS, May 2 (Reuters) - Germany's DAX index has moved into 'overbought' territory after a nearly 9 percent rise in two weeks and is ripe for a pull-back in the short term, charts showed on Monday.
Its relative strength index (RSI) hits 71.5 on Monday -- with 70 and above considered "overbought" -- while the chart's slow stochastic and moving average convergence-divergence (MACD), two short-term trend indicators, show the index is poised for a retreat.
"The index is getting strongly overbought, and there were three gaps left open over the past two weeks. There will be a technical correction and a bout of profit taking at some point," said Gilles Borrel, the Paris-based head of technical analysis at First Finance.
"This will create an opportunity to buy on the dip, probably around a retracement of about the third of the rally."
A gap is a break between prices on a chart that happens when a stock makes a steep move, up or down, with no trading occurring in between. It is said that gaps left open will eventually be filled, with the stock moving back and cover the empty trading range, although it doesn't always happen and it can take time for the gaps to be filled.
At 1207 GMT, the DAX was up 0.8 percent at a three-year high of 7,576.76 points, boosted by optimism over corporate results while the death of Osama bin Laden also provided support to stocks. Germany's benchmark has gained 17 percent since mid-March.
A 33 percent retracement of the index's rally started in mid-March would bring the DAX to around 7,230 points and filled the latest two gaps.
The index, home of bellwethers such as Siemens and SAP, is up 9.4 percent so far this year, outpacing Europe's broad STOXX 600 index, which is up 3.1 percent over the same period. (Reporting by Blaise Robinson; Editing by Louise Heavens)