dax daily outlook wed 02 mar 2016 further potential push up to test 993010060 before setback sets in

 

(Click to enlarge chart)

What happened yesterday/earlier

The Germany 30 Index (proxy for the DAX futures) has pushed up above the predefined 9330/285 short-term pivotal support, broke above the 9580 range top and hit our expected target at 9680/785.

Please click on this link for a recap on our previous outlook/strategy.

Key elements

• The Index remains in a bullish dynamic with the significant short-term support now rests at 9580, the former short-term range top  hat linked the minor swing highs area of 04 February and 22 February 2016.
• Based on the Elliot Wave Principal, the Index is now undergoing a bullish wave sequence of a minor degree (multi-days) which consists typically a set of 5 waves labelled (1,2,3,5) that started from 24 February 2016 low @11pm. Current price action is now forming the wave 3 upleg with a potential target set at 9930  defined by 1.382 Fibonacci projection of the length of wave 1 projected from the low of wave 2, yesterday low of 9331.
• The above mentioned wave 3 projection target of 9930 also confluences with the upper boundary of the ascending channel in place since 11 February 2016 low and our medium-term upside target as per highlighted in our latest weekly outlook/strategy (click here for a recap on the derivation of this level).
• The hourly (short-term) Stochastic oscillator is coming close to the extreme overbought level which highlights the risk of a pull-back in price action of the Index.

Key levels (1 to 3 days)

Intermediate support: 9680

Pivot (key support): 9580

Resistances: 9930 & 10060

Next support: 9330

Conclusion

Bullish tone remains intact for the Index. Any potential pull-back is likely to be held by the 9680/580 significant support zone for another potential upleg to target 9930 with a maximum limit set at 10060 before a potential setback sets in.

On the flipside, failure to hold above the 9580 short-term pivotal support may put the bulls on hold to see a deeper pull-back towards the lower boundary of the ascending channel from 11 February 2016 low now at 9330.

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