Stock rebound flips immediate focus to the upside (DAX forecast)

Intermediate
  • Global stock averages have been under negative pressures all week from concerns regarding the coronavirus.
  • However, the downside forces were eased late yesterday after global share indices rebounded after the World Health Organisation painted a less negative picture on the coronavirus than had been expected.
  • Although the outlook for stock indices remains for potential further losses into February, in the very near term (today), the bias has shifted higher.
  • Here we look at the benchmark German stock average, the DAX.

DAX future day trade outlook:  Rebound bias

A selloff Thursday to a new correction low through 13157.5 but to rebound from above the next 13079.5 level from 13115 and to then stage a solid recovery to probe into the 13270/280 resistance area, to 13275, to ease bear forces and flip risks higher again for Friday. 

  • We see an upside bias for 13275/280 and 13215.5; a break above here aims for 13373.5, maybe 13398.5.
  • But through 13174 opens risk down towards 13115 and maybe 13079.5.

DAX future intermediate-term outlook

A January plunge below 13357 set an intermediate-term range as 12939 to 13639.

Upside threat: Above 13639 sets an intermediate-term bull trend to aim for 13750 and 13955.

Downside threat: Below 12939 sees an intermediate-term bear trend to aim for 12786.5, 12375.5 and 12000.

 

DAX Future Chart

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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