dax daily outlook for wed 19 aug 10910 needs to be taken out to negate current bearish tone 10690820
<p>(Click to enlarge chart) What happened yesterday The German 30 Index (proxy for the DAX) has pull-backed as expected and tested the weekly pivotal support […]</p>
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What happened yesterday
The German 30 Index (proxy for the DAX) has pull-backed as expected and tested the weekly pivotal support at 10890/10810.
Please click on this link for a recap on our previous daily outlook.
Key elements
- Current price action is now testing the 10810 support. This lacklustre performance is in line with other major stock indices triggered the 6% plunge seen in the Shanghai Composite Index.
- The intermediate resistance stands at 10910 which the short-term descending line (in pink) that is joining the highs since 17 August 2015 @ 8am.
- The hourly Stochastic oscillator has dipped into the oversold region which suggests limited downside potential.
- The next significant short-term resistance will be at 11090/11140 which is defined by the congestion zone seen between 13 August to 17 August 2015 and 38.2% Fibonacci retracement of the recent down move from 06 August 2015 high @4pm to current 19 August 2015 low.
Key levels
Pivot (key support): 10810
Resistance: 10910 & 11090/11140
Next support: 10600
Conclusion
The Index is now testing the pivotal support at 10810 and it needs to break above the 10910 intermediate resistance in order to negate the bearish tone to see a potential recovery to target 11090/11140 resistance zone in first step.
On the other hand, an hourly close below 10810 is likely to see the continuation of the waterfall slide towards the key long-term support of 10600.
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