dax daily outlook tues 17 nov risk of pull back with supports at 1068010590 before another upleg 176
<p>(Click to enlarge chart) Key elements The Germany 30 Index (proxy for the DAX) has continued to bounce higher from the trendline support (in dark […]</p>
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Key elements
- The Germany 30 Index (proxy for the DAX) has continued to bounce higher from the trendline support (in dark blue) linking the higher lows since 29 September 2015.
- This trendline support is now at 10590 which also confluences closely with the 61.8% Fibonacci retracement of yesterday’s rally from its low of 10489 to this morning’s current Asian session high.
- Current action is now resting right below the intermediate resistance (trendline + Fibonacci cluster) at 10840 as per highlighted in our latest weekly outlook/strategy (click link for more details).
- The hourly (short-term) Stochastic oscillator exited from the overbought region and still shows room for further downside potential before reaching its extreme oversold level. This observation suggests a risk pf a pull-back in price action as yesterday’s rally has appeared “overstretched” in terms of momentum.
Key levels (1 to 3 days)
Intermediate support: 10680
Pivot (key support): 10590
Resistance: 10840 & 11050
Next support: 10380 (weekly pivot)
Conclusion
The Index is now right below an intermediate resistance of 10840 where it faces the risk of a pull-back towards 10680 with a maximum limit set at the 10590 daily pivotal support. Thereafter, another round of potential upside movement is likely to resume to target the last swing high at 11050.
However, a break below the 10590 short-term pivotal support may negate the expected bullish tone to see a slide to test the weekly pivotal support at 10380.
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