dax daily outlook fri 29 jan 2016 spoked by european banks earnings watch 9770 to revive potential b
<p>(Click to enlarge charts) What happened yesterday The Germany 30 Index (proxy for the DAX futures) has broken below the 9680 short-term pivotal support due […]</p>
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What happened yesterday
The Germany 30 Index (proxy for the DAX futures) has broken below the 9680 short-term pivotal support due to weaker than expected earnings results from European banks particularly Deutsche Bank.
Our short-term bullish technical view (1 to 3 days) has been put on hold/invalidated after yesterday’s price action but near in mind that the medium-term (1 to 3 weeks) view of an expected mean reversion / “snap-back” rally remains intact as the Index remains above the 9300 medium-term pivotal support (click here for more details on our current weekly outlook/strategy).
Please click on this link for a recap on our previous daily outlook/strategy.
Key elements
- Despite yesterday decline of 2.9% (one of the worst performer among major indices), the daily (medium-term) RSI oscillator is still holding above its trendline support which suggests that the medium-term upside momentum remains intact (see daily chart).
- On the shorter-term, the Index has broken below the ascending channel’s lower boundary that has linked the higher lows since 21 January 2016 now turns pull-back resistance at 9770.
- The next significant short-term support rests at 9560 which is defined by the minor swing low of 26 January 2016 @4pm and a Fibonacci cluster which yesterday’s decline has managed to stall and did a rebound above it.
Key levels (1 to 3 days)
Pivot (key support): 9560
Resistance: 9770, 9880/9935 & 10165/280
Next support: 9300 (medium-term pivot)
Conclusion
9560 will be the short-term pivotal support but only a break above 9770 is likely to revive the potential short-term bullish force to retest 9880/9935 before targeting the 10165/280 significant resistance zone (our medium-term expected upside target).
However, a break below 9560 is likely to negate the bullish tone for a further slide towards the 9300 medium-term pivotal support.
Disclaimer
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