European stocks surge, playing catch up with the US (DAX forecast)

Intermediate
  • In our article here on Tuesday we highlighted that European equity indices are now helping US share averages in their push higher, with European stock markets aggressively resuming upside pressures.
  • The bull theme for US stock indices continues, with the S&P 500 future now poised to test its all-time high from February 2020. at 3397.5.
  • However, here we focus on the German benchmark, the DAX.

DAX day trade outlook: Upside risk growing for key 13304.5

Day trade update and view

A Wednesday advance above 13043.5 to 13098, to build on Tuesday’s surge higher above resistances at 12807, 12872.5 and 12973 to 13043.5, sustaining the early August rebound from 12199.5, to leave risks higher for Thursday.

Day trade setup

  • We see an upside bias for 13098 and 13208; a break here aims for the key cycle high at 13304.5 and maybe the key February bear gap at 13421-492.5.
  • But below 12803.5 quickly aims for 12766 and opens risk down to 12593.5 and possibly 12508.5.

DAX intermediate-term outlook

The latter July plunge below 12384.5 signalled an intermediate-term shift to a broader range seen as 11925.5 to 13304.5.

  • Upside risks: Above 13304.5 sets an intermediate-term bull trend to target 13824 and 15000.
  • Downside risks: Below 11925.5 sets an intermediate-term bear trend to target 11589.5, 10856.5 and 10159.

6 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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