Next bull leg resuming for share indices (DAX forecast)

Intermediate
  • A firm rebound for global stock averages Wednesday, after the late June-early July surge higher, to try to reject the corrective setback tone so far this week.
  • This has resumed the more bullish threat we highlighted last week as stock indices have begun to resolve the consolidation theme from earlier in June to a more bullish outlook.
  • The more bullish viewpoint has been driven by better than consensus economic data, still somewhat ignoring the threats from the increase in new COVID-19 cases globally (particularly in southern US states).
  • Here we look at the German benchmark share average future, our DAX forecast for today and into July.

DAX day trade outlook: Pointing back higher

Day trade update and view

A Wednesday dip into the 12456.5/23.5 support area, then a bounce from 12445, to try to reject the negativity from Tuesday’s selloff on below 12597 support.

We therefore hang onto positive pressures from the early July push above the topping trend line from mid-June and 12591, 12644.5 plus 12770.5 resistances to 12833, to keep the risks higher for Thursday.

Day trade setup

  • We see an upside bias for 12718.5 and 12833/855; a break here aims for the cycle peak at 12934, maybe even 13000.
  • But below 12445/423.5 opens risk down to 12303.5 and possibly 12218/210.

DAX intermediate-term outlook

The late May rally above 11417.5 signalled an intermediate-term shift from a bear trend to a broad, neutral range and the acceleration above the 12275.5 swing peak from early March, sets an intermediate-term bull trend.

  • Upside risks: We see an intermediate-term bull trend and risk for 13824 and 15000.
  • What changes this? Below 11589.5 shifts the intermediate-term bull trend straight to an intermediate-term bear trend.
6 Hour DAX Chart
6 Hour DAX Chart

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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