European stocks poised to follow the US higher (DAX forecast)

Intermediate
  • In our article here last week we tried to spotlight European stock averages trying to play catch up won the upside with their US counterpart.
  • The S&P 500 cash index made a new record high this week (with the future poised for a similar signal going into today), whilst the Nasdaq 100 continues its march to record levels.
  • Although European equity indices have fallen slightly behind, they have remained resilient in consolidation and we see upside pressures resuming into latter August.
  • However, here we focus on the German benchmark, the DAX.

DAX day trade outlook: Looking for a further rebound

Day trade update and view

A Wednesday-Thursday overnight breakdown below our supports in the 12785.5/66 area, but to hold just below here and bounce from 12732, and whilst holding here we just hold onto upside pressures from the earlier August, strong advance to 13098 after the rebound from 12199.5, to just leave risks higher for Friday.

Day trade setup

  • We see an upside bias for 12906 and 12990.5; a break here aims for 13050 and 130985.
  • But below 12732 aims for 12593.5 and possibly opens risk down to 12508.5.

DAX intermediate-term outlook

The latter July plunge below 12384.5 signalled an intermediate-term shift to a broader range seen as 11925.5 to 13304.5.

  • Upside risks: Above 13304.5 sets an intermediate-term bull trend to target 13824 and 15000.
  • Downside risks: Below 11925.5 sets an intermediate-term bear trend to target 11589.5, 10856.5 and 10159.

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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