dax daily outlook fri 11 dec right below 1061010675 resistance to resume potential downleg 179036201

(Click to enlarge charts)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has inched slightly higher but it remained below the 10610/10675 short-term pivotal resistance.

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

Key elements

• Yesterday’s slight push up in price action has lead it to test the 10610/10675 short-term pivotal resistance as per highlighted in our prior day technical outlook/strategy.
• The Index is still capped below the lower boundary (resistance) of a short-term descending channel (in pink) in place since 07 December 2015 high which also confluences with 10610/10675 short-term pivotal resistance.
• The daily (medium-term) RSI oscillator remains bearish below their former supports now turn pull-back resistances (in dotted red). In addition, the hourly (short-term) Stochastic has started to turn down close to its overbought region. These observations suggest that downside momentum remains intact and the Index is now at a potential turning point for a slide in price action.
• The next key support to watch will be at 10380 as per defined by the lower boundary of the short-term descending channel (in pink), the pull-back support area of the prior ‘Double Bottom” bullish breakout and the 50% Fibonacci retracement of the multi-month up move from 29 September 2015 low to the 30 November 2015 high.

Key levels (1 to 3 days)

Pivot (key resistance): 10610/10675

Support: 10380

Next resistance: 10980

Conclusion

As long as the 10610/10675 daily (short-term) pivotal resistance is not surpassed, the Index is likely to shape a potential final down leg to test the critical support at 10380.

On the other hand, a break above the 10610/10675 pivotal resistance may put the bears on hold for a squeeze up towards the minor 07 December 2015 swing high area and trendline resistance linking the lower highs from 01 December 2015 at 10980.

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