dax daily outlook fri 16 oct risk of pull backconsolidation above 1009010030 support before new rise

(Click to enlarge charts) What happened yesterday The Germany 30 Index (proxy for the DAX) has recovered as expected and hit the short-term range top […]


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By :  ,  Financial Analyst

DAX (daily)_16 Oct  2015

DAX (1 hour)_16 Oct  2015(Click to enlarge charts)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has recovered as expected and hit the short-term range top zone of 10150/10188 in place since 12 October 2015 high.

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

Key elements

  • In the shorter-term, the Index is being supported by an ascending trendline in place since 15 October 2015 low now at 10090 which is also close to a former horizontal resistance now turns support at 10030.
  • The significant medium-term resistance is at 10380 which confluences with the neckline resistance of an impending bullish “Double Bottom” chart formation, upper boundary of the short-term ascending channel from the 29 September 2015 low (in orange as depicted on the hourly chart) and the 5th wave target of 1.00 time of the length of wave 1 projected from the low of wave 4 (9901) seen at 15 October 2015 @4am based on the Elliot Wave Principal.
  • The hourly (short-term) Stochastic oscillator is dipping down and still has some room for further downside before reaching its oversold region. This observation suggests a potential pull-back/consolidation in price action of the Index at this juncture.

Key levels (1 to 3 days)

Intermediate support: 10090

Pivot (key support): 10030

Resistance: 10320/10380

Next support: 9900 & 9780 (weekly pivot)

Conclusion

The Index may see a potential pull-back first towards the intermediate support at 10090 with a maximum limit set at the 10030 daily pivotal support before a push up to target the 10320/10380 significant resistance.

However, a break below the 10030 short-term pivotal support may negate the bullish tone to see a slide to retest the 9900 support (yesterday’s swing low) and even the 9780 weekly pivotal support (ascending channel’s lower limit & the pull-back support of the descending channel bullish breakout)

Disclaimer

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