dax weekly outlook for 02 mar to 06 mar no clear bearish signals turn neutral between 1145511505 112

(Click to enlarge charts)

What happened last week

The German 30 Index (proxy for the DAX) has broken above the 11140 weekly pivotal resistance and invalidated our setback scenario. Please click on this link for more details on our last weekly outlook.

Key elements

• Current price action is right below the upper boundary (in orange) of a long-term ascending channel in place since 11 September 2011 at 11455/11505 which is also a Fibonacci projection cluster (see weekly chart).
• The long-term RSI oscillator is overbought but without any bearish divergence signal (see weekly chart).
• The 20-day Moving Average acting as a support at 10980 (see daily chart).
• The intermediate and short-term Stochastic oscillators have reached their respective “extreme” overbought region (see daily & 4 hour charts).
• The short-term trendline support (in dark blue) in place since 10 February 2015 low stands at 11230 which also coincides closely with the 23.6% Fibonacci retracement from 10 February 2015 low to the current high (see 4 hour chart).
• The next supports at 10980 and 10590 also correspond with the 23.6% and 38.2% Fibonacci retracement from 06 January 2015 low to the current high (see 4 hour chart).

Key levels (1 to 3 weeks)

Resistance: 11455/11505 & 12030

Support: 11230, 10980 & 10590

Conclusion

Even though the Index is right below the 11455/11505 resistance but there are no clear bearish signals at the moment. We turn neutral between 11455/11505 and 11230.

Only a clear break below 11230 is likely to trigger the intermediate term decline towards 10980 with a maximum limit set at 10590. On the other hand, a clearance above 11505 may see the continuation of the bullish trend to target 12030 next.

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.