Share indices cautious, but vulnerable – DAX Forecast

  • A consolidation for global stock averages since the rebound to begin this week.
  • Markets are caught between the positive tone from the May-June upside extensions and the negative tone from the selloffs from last week, driven by downbeat outlook for the US economy from the Fed PLUS by the rise in coronavirus cases in some US states, alongside new outbreaks in China and Japan.
  • Here we look at the German benchmark index, with our DAX forecast.

DAX day trade outlook: Hanging onto a deeper setback bias

A Wednesday consolidation to just prod up above 12439 to stall back from just below 12455.5 resistance, from 12440, to then selloff overnight close to Tuesday’s bull gap at 12134-101, and whilst below the 12440/455.5 area of resistance we hang onto negative pressures from Monday’s selloff through 11625 support, plus from last week’s aggressive plunge (through a key support at 12325.5 and to close the bull gap at 12100-082), to aim to the downside Thursday.

  • We see a downside bias for the bull gap at 12134-101 and 11902; a break here aims for 11759.5 and maybe 11589.5.
  • But above 12440/455.5 aims for 12610; above here opens risk up to 12770.5 and maybe the cycle high at 12934.

DAX intermediate-term outlook

The late May rally above 11417.5 signalled an intermediate-term shift from a bear trend to a broad, neutral range and the acceleration above the 12275.5 swing peak from early March, sets an intermediate-term bull trend.

  • Upside risks: We see an intermediate-term bull trend and risk for 13824 and 15000.
  • What changes this? Below 10510.5/509.5 shifts the intermediate-term bull trend to neutral; below 10159 to an intermediate-term bear trend.

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

Comment on this video

  1. you guys must be losing lot of money ? lol !!how can you make bear case for a price above trend line and broke a falling edge on 4hr chart ? what a waste …

    1. You are entitled to your view. But we do have a likely second lower high established for a top.
      And we have failed twice below resistance at 12455.5.
      And it’s now lower today.

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