- Another aggressive selloff over the past 24 hours in global stock averages, with safe havens, bonds and the Japanese yen rallying again.
- This was again a product of growing worries regarding the global spread outside of China, of the coronavirus.
- Global stock averages have capitulated through key levels from Q1 2020 and even Q4 2019.
- Here we focus on the future on German benchmark average, the DAX0.
DAX Future day trade outlook: Intermediate-term bearish shift reinforced, but wary of a corrective bounce
A Tuesday plunge through key supports at 12880.5, 12786.5 and 12640.5 to reinforce Monday’s bear gap plunge (gap 13421-492.5) through key 13219 support (for an intermediate-term shift to bearish), and whilst below 12813 we see a further downside threat Wednesday, but given momentum is at an oversold position, we are wary of a corrective recovery on a move above 12813.
- We see a downside bias for 12713.5 and 12606/12592.5; a break below aims for 12592.5, then 12512 and 12440, maybe even 12375.5.
- But above 12813 targets 12869.5; above opens risk up towards 13009.5, possibly even 13158.5.
DAX intermediate-term outlook
The late February plunge below 13219 signalled an intermediate-term shift to a bear trend.
Downside risks: We see an intermediate-term bear trend and risk for 12375.5, 12000 and 118075.
What changes this? Above the bear gap at 13421-492.5 see an intermediate-term range and through 13824 an intermediate-term bull trend.
4 Hour DAX Future Chart