Featured Trade: DAX potential fresh impulsive downleg

DAX fresh potential downleg.

Short-term technical outlook on DAX/Germany 30 Index (Thurs 28 Mar)



click to enlarge charts

Key technical elements

  • The recent rebound of 2% seen on the Germany 30 Index (proxy for the DAX futures) from its Mon, 25 Mar low of 11270 has reached a significant short-term resistance at 11500 which is defined by the former minor swing low area of 21 Mar 2018 and a Fibonacci retracement/expansion cluster (38.2% retracement of the recent slide from 19 Mar 2019 high to 25 Mar 2018 low & 1.236 expansion of the push up from 25 Mar low to 26 Mar high projected from 26 Mar 2019 minor low).
  • Since its 25 Mar 2019 low of 11270, the price action of Index has evolved into a minor “bearish flag” range configuration with its support at 11380.
  • The 4-hour Stochastic oscillator has started inch down from its overbought region coupled with the 1- hour RSI oscillator that remains bearish below its resistance at the 50 level. These observations suggest a revival of short-term downside momentum of price action.

Key Levels (1 to 3 days)

Pivot (key resistance): 11500

Supports: 11380 & 11260

Next resistance: 11650 (key medium-term pivot)

Conclusion

If the 11500 key short-term pivotal resistance is not surpassed and a break below 11380 is likely to reinforce the start of another potential impulsive downleg to target the next near-term support at 11260 in the first step.

However, a clearance above 11500 negates the bearish tone for an extension of the rebound to test the 11650 key medium-term pivotal as per highlighted in weekly technical outlook report published earlier on Mon (click here for a recap).

Charts are from City Index Advantage TraderPro




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