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

Steve Miley

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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