dax on going minor pull back may be ending above 1058010470 support 1826092016

Daily Outlook, Thursday 11 August 2016

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has indeed shaped the expected minor pull-back to print a low of 110630 after a test right on the predefined intermediate resistance of 10710 (printed a high of 10712 during yesterday European opening session) as per highlighted in our daily short-term technical outlook published yesterday.

Please click on this link to recap our previous daily short-term technical outlook/strategy

Key elements

• The hourly (short-term) Stochastic oscillator has inched back and it is now coming close to its extreme overbought level which highlights the risk of another leg of minor pull-back/consolidation in price action.
• Based on the Elliot Wave Principal and fractal analysis, yesterday’s pull-back/consolidation (minor corrective wave 4) is likely not to have ended and there is still another potential downleg towards the expected projected end target at the 10580/10470 zone.
• The aforementioned lower limit of the corrective wave 4 potential end target zone of 10470 also confluences with the ascending trendline support (depicted in green) in place since 03 August 2016 low and the minor swing high area of 01 August/08 August 2016.
• The next significant short-term resistance remains at 10870/990 which is defined by the intermediate-term swing high areas of 07/30 December 2015 and a Fibonacci cluster

Key levels (1 to 3 days)

Intermediate support: 10580

Pivot (key support): 10470

Resistances: 10710 & 10870/990

Next support: 10350

Conclusion

Minor pull-back is coming close to an inflection zone. The Index may see another round of dip towards the intermediate support of 10580 with the maximum limit set at the 10470 daily short-term pivotal support before a potential upleg materials to target the next resistance at 10870/990 (medium-term target set for this week).

On the other hand, a break below the 10470 short-term pivotal support may invalidate the preferred bullish tone to open up scope for a deeper pull-back to test the 10350 pull-back support of the former long-term descending range top bullish breakout.

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