dax weekly outlook for 02 feb to 6 feb potential push up towards triangle range top at 10800 1423320

What happened last week

The German 30 Index (proxy for the DAX) has traded sideways. Please click on this link for more details on our last weekly outlook.

Key elements

• The upper boundary of the long-term ascending channel (in orange) in place since September 2011 stands at 10960/11000 (see daily chart).
• The intermediate term RSI oscillator is now resting at its horizontal support (see daily chart).
• The 13-day Moving Average is coming to act as a support at around 10550 (see daily chart).
• Since hitting its all-time high of 10852 on 26 January 2015, the Index is consolidating within an impending “Symmetrical Triangle” configuration with upper and lower limits at 10800 and 10600/10550 respectively (see 4 hour chart).
• The lower limit of the “Symmetrical Triangle” at 10600/10550 also corresponds closely with the 23.6% Fibonacci retracement from 06 January 2015 low to 26 January 2015 high (see 4 hour chart).
• The short-term Stochastic oscillator has dipped into the oversold region (see 4 hour chart).

Key levels (1 to 3 weeks)

Pivot (key support): 10550

Resistance: 10800 & 10960/11000

Next support: 10290

Conclusion

Based on the latest elements, we have tightened weekly pivotal support to 10550 for a potential push up towards 10800 (upper limit of the “Symmetrical Triangle”) in the first instance before another potential short-term consolidation phase materialise within the “Symmetrical Triangle. Only a clear break above 10800 is likely to propel the Index higher towards the 10960/11000 long-term significant resistance.

However, failure to hold above 10550 is likely to see a further push down towards the next support at 10290.

Disclaimer

The information contained in this material is intended for general circulation only.  It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs.  Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.  All queries regarding the contents of this material are to be directed to City Index Asia Pte Ltd.