European stocks averages hit new cycle highs – DAX and EURO STOXX 50 forecast

Intermediate
  • A strong rally for European (and global) equity indices to start the week with more positive news from Astra Zeneca/ Oxford University on their COVID-19 vaccine trials.
  • This “risk on” theme was also helped by Janet Yellen’s appointment as Treasury Secretary by US President-elect Joe Biden.
  • Plus, the positive outlook for stock averages has been helped by the start of the US Presidential transition of power.
  • European averages in some instances managed to pop to new cycle highs.
  • Here we look at the German and pan-European benchmark averages, the DAX and the EURO STOXX 50.

DAX day trade outlook: New cycle high retains bull theme

Day trade update and view

A strong advance on Monday above the cycle peak at 13290.5 to 13308.5, and despite a setback from here to rebound from 13116 and still build on bull forces from the firm, mid-November rally, plus from the extremely aggressive, earlier November surge through the key 13163 level, to keep the risk higher for Tuesday.  

Day trade setup

  • We see an upside bias for 13266.5 and 13308.5; a break here quickly aims for 13339, maybe the key 13461 peak and 13492.5 gap barrier.
  • But below 13116 opens risk down to 13024.5, maybe 12921.

DAX intermediate-term outlook

The push above 13163 signalled an intermediate-term shift to a bull trend.

  • Upside risks: We see an intermediate-term bull trend to aim for 13461, 13421-492.5, 13824 and maybe 15000.
  • What changes this? Below 11772.5 shifts the intermediate-term bull trend straight to an intermediate-term bear trend.

8 Hour DAX Chart

dax chart

EURO STOXX 50 day trade outlook: New cycle high, still aiming higher

Day trade update and view

A strong advance on Monday to push above the recent cycle high at 3495 and also psychological resistance at 3500 up to 3504, and despite the intraday setback from here, the rebound from 3458 sustains upside pressures from the strong, mid-November advance, plus from the earlier November, aggressive rally through a significant resistance from March at 3467 and previously the key 3301 level, to keep the threat to the upside for Tuesday.

Day trade setup

  • We see an upside bias for 3494; a break above targets 3504, maybe 3527.
  • But below 3458 opens risk down to 3438/36 and possibly 3392.

EURO STOXX 50 intermediate-term outlook

The push above 3301 signalled an intermediate-term shift to a bull trend.

  • Upside risks: We see an intermediate-term bull trend to aim for 3679, 3550-73 and 3868.
  • What changes this? Below 3009 shifts the intermediate-term bull trend straight to neutral an intermediate-term bear trend.

8 Hour EURO STOXX 50 Chart

euro stoxx chart

Editor in chief

Steve Miley is the Market Chartist and 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 Mar... Continued

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