dax daily outlook fri 09 oct bullish tone remains intact above 10007 support 1525032015

(Click to enlarge charts)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has managed to push higher as expected and broke above the key 10080 weekly pivotal resistance in the late U.S. session.

Due to inter-market relationships, we have warned earlier on Wednesday that the conviction of a medium-term (1 to 3 weeks) “last push down” scenario for the DAX has turned low even though it has remained below the 10080 level. Yesterday’s price action has been the deciding factor for the bullish camp.

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

Key elements

• Price action has broken above the 10080 weekly pivotal resistance and reintegrated back above the former pull-back resistance (in purple) of the descending channel’s bearish breakout that has rejected the previous advance seen on 09 September 2015.
• The daily (medium-term) RSI oscillator has continued to inch higher above its former resistances now turn pull-back supports (in dotted green) which indicate a build-up in upside momentum.
• Since the “Black Monday”, 24 August 2015 low, the Index has traced out an impending bullish “Double Bottom” chart pattern with its neckline resistance at 10380.
• On the shorter-time frame, current price action is evolving with an ascending channel (in orange) in place since 02 October 2015 low @9pm with its upper limit (resistance) and lower limit (support) at 10380 and 9997 respectively.
• The 10380 resistance confluences with the 2.00 Fibonacci projection from 29 September 2015 low @2pm to 02 October 2015 low @9pm (an extended 3^rd wave target based on the Elliot Wave Principle) and the 10320 minor rang top joining the highs of 10 September, 16 September and 18 September 2015.

Key levels (1 to 3 days)

Intermediate support: 10080

Pivot (key support): 10007

Resistance: 10320/10380 & 10520

Next support: 9908 & 9780

Conclusion

As long as the 10007 daily (short-term) pivotal support holds, the Index is likely to see a continuation of the upleg to target the next resistance at 10320/10380.

However, failure to hold above the 10007 pivotal support may invalidate the bullish expectation for a slide to retest the pull-back support of the former descending channel bullish breakout at 9908 and even 9780 next.

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