European stock averages bullish – EURO STOXX 50 and DAX forecast

  • The global “risk on” theme remains intact.
  • Stock averages continue their October march higher, recouping September losses.
  • Risk on” is still being driven by:
    • Hopes of a US economic relief package.
    • Short-term positivity seen from a Biden Presidential victory and Democrat congressional wins
    • Hopes of a UK-EU trade deal
  • Here we look at the pan-European and German benchmark averages, the EURO STOXX 50 and the DAX.

EURO STOXX 50 day trade outlook: Upside threats reinforced

Day trade update and view

A Monday probe still higher to 3301, still building on last Thursday’s strong advance through multiple resistances (3243 and 3255), after a consolidation above 3189 support, from 3192, to retain the positivity from the erratic rally from late September, to keep the bias higher for Tuesday.

Day trade setup

  • We see an upside bias for 3301 and 3315; a break here maybe aims for key 3349.
  • But below 3264/58 aims for 3243 and opens risk down towards 3225.

EURO STOXX 50 intermediate-term outlook

The push below 3139 signalled an intermediate-term shift to a bear trend.

  • Downside risks: We see an intermediate-term bear trend to aim for 3046, 2844 and 2690.
  • What changes this? Above 3349 shifts the intermediate-term bear trend to neutral; through 3395 to an intermediate-term bull trend.
euro stoxx 50 chart
8 Hour EURO STOXX 50 Chart

DAX day trade outlook: Pushing up and pointing higher

Day trade update and view

A Monday advance just above our 13136.5 resistance to 13163, to build on last Thursday strong rally to overcome 12968.5 and 13033.5 resistances, plus the whole rally from late September and the early October erratic advance, to keep the bias higher for Tuesday.

Day trade setup

  • We see an upside bias through 13163 for the key 13244.5/279 resistance area; a break here aims for 13339 and then maybe towards the cycle peak at 13461 and February gap top at 13492.5.
  • But below 12993 aims for 12938/921 and opens risk down towards 12758.5.

DAX intermediate-term outlook

The late September sell-off below 12625.5 signalled an intermediate-term shift to a broader range seen as 12199.5 to 13244.5/279.

  • Downside risks: Below 12199.5 sets an intermediate-term bear trend to target 11589.5, 10856.5 and 10159/10000.
  • Upside risks: Above 13244.5/279 sets an intermediate-term bull trend to target 13461, 13824 and maybe 15000.

8 Hour DAX 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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