Still looking for a further stock rebound (DAX forecast)

Intermediate
  • A we highlighted in our report last Friday Looking for a stock index rebound (S&P 500 forecast), a further move to a “risk off” phase to start this week, with stock indices gapping lower Monday, particularly in Europe with many markets closed for national holidays on Friday.
  •  This has been primarily driven by negative comments from US government officials, including President Trump regarding China and potential tariffs, due to the spread of the coronavirus.
  • Despite the selloff across global equity indices, markets have rebounded already Monday and again into Tuesday and we see further rebound risks for today.
  • Here we review prospects for the future on the German benchmark index, the DAX.

DAX Future day trade outlook: Looking for a further bounce

A Monday bear gap, now at 10656.5-756 after Thursday’s plunge lower through various supports, but to rebound Monday and this morning into the gap from new 10367.5 support (just above our level at 10322), to hang onto positive forces from the strong, late April rally through the mid-April peak at 10811.5 (into the key March bear gap at 11092-11417.5), to 11337, to just keep risks back higher into Tuesday.

  • We see an upside bias for 10656.5 and the top of the gap at 10756; a break above aims for 10861 and maybe 10950.
  • But below 10482 aims at 10367.5 and 10322 targets; through here aims maybe for 10223.5 and 10165/141.

DAX Future intermediate-term outlook

The late February plunge below 13219 signalled an intermediate-term shift to a bear trend.

  • Downside risks: We see an intermediate-term bear trend and risk for 7422 and 7000/6948.
  • What changes this? Above 11417.5 sees an intermediate-term range and through 12275.5 an intermediate-term bull trend.

4 Hour DAX Future 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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