- Global equity indices are continuing to prove resilient this week after the aggressive selloff seen at the start of August last week and again on Monday this week.
- The moves lower have been driven by global growth concerns in the wake of an escalation in trade war tensions between the US and China.
- The solid consolidation activity seen since Tuesday across global stock averages, however, highlights possible bottoming efforts and leaves the immediate risks for upside activity into the end of this week.
- This positive tone has been bolstered overnight Wednesday/ Thursday by better than anticipated Chinese trade data.
- Here we spotlight the German benchmark share index, the DAX.
DAX bottoming effort and rebound risks intact
An erratic consolidation theme Wednesday between 11741 resistance and 11536 support after Tuesday’s rebound up to 11741 eased the bear tone from Monday’s plunge through multiple supports, and whilst holding above 11536 we see a base effort and immediate threat back to the upside Thursday.
We see an intermediate-term bear trend.
- We see an upside bias for 11741 and 11791; break here aims towards 11900.
- But below 11644.5 opens risk down to 11606.5, then for 11536.
Intermediate-term Outlook – Downside Risks: We see a downside risk for 11423.
- Lower targets would be 11271 and 10859.
- What Changes This? Above 12260 shifts the intermediate-term outlook back to neutral; above 12466 is needed for an intermediate-term bull theme.
4 Hour DAX Future Chart