dax weekly outlook for 25 may to 29 may risk of pull back below 1205012150 before potential new rise
<p>(Click to enlarge charts) What happened last week The German 30 Index (proxy for the DAX) has managed to stage a bullish breakout from the […]</p>
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(Click to enlarge charts)
What happened last week
The German 30 Index (proxy for the DAX) has managed to stage a bullish breakout from the upper boundary of the former short-term descending channel at 11750 as expected.
Please click on this link to review our previous weekly outlook.
Key elements
- The long-term Stochastic oscillator has continued to inch higher from its oversold region and still has ample room before reaching its extreme overbought level (see weekly chart).
- The pull-back support former long-term ascending channel bullish breakout (in orange), trendline support (in dark blue) joining the lows since 16 October 2014, 100-day Moving Average (in light green) all confluences at the 11600 level (see daily chart).
- The intermediate term RSI oscillator remains bullish above its 50% neutrality level and trendline support (see daily chart).
- The short-term Stochastic oscillator still has some room for further downside before reaching its extreme oversold level which highlights the risk of a pull-back in price action of the Index (see 4 hour chart).
Key levels (1 to 3 weeks)
Intermediate support: 11750
Pivot (key support): 11600
Resistance: 12050/12150 & 12400
Next support: 11190
Conclusion
Technical elements are still positive. However below 12050/12150, the Index is likely to see a pull-back towards the intermediate support at 11750 with a maximum limit set at the 11600 weekly pivotal support before another potential upside movement occurs to target the 13 April 2015 swing high at 12400.
On the other hand, failure to hold above 11600 is likely to negate the bullish tone for a slide to retest the 11190 support.
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