dax daily outlook friday 22 apr 2016 view unchanged potential last push up in progress above 1037028

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has shaped the expected pull-back in the late European session to test the 10370 predefined short-term intermediate support as per highlighted in yesterday’s short-term technical outlook/strategy in line with weakness seen across the major benchmark U.S. stock indices.

Please click here for a recap on our previous daily short-term outlook/strategy.

Today upcoming key Germany/European economic data will be as follow:

1)      Germany Markit Manufacturing & Services PMI for Apr @0730 GMT

2)      Euro zone Markit Manufacturing & Services PMI for Apr @0800 GMT

Key elements

• The Index is likely to be in a tail end of a potential medium-term blow-off rally in place since 07 April 2016 low (up 11% within 2 weeks). The daily RSI oscillator, a measure of price action momentum remains bullish above its pull-back support (in dotted green) and still has some room left for further upside before reaching its extreme overbought level (see daily chart).
• The significant short-term support remains at 10280 which is defined by the minor swing low area of 20 April 2016 @4pm and the 23.6% Fibonacci of the entire current short-term rally from 08 April 2016 low to current week high of 10527 (see hourly chart).
• The significant resistance remains at the 10630/860 zone which is defined by the upper boundary of the bearish descending channel in place since the 52-week high of 12408 printed on 12 April 2015 and a Fibonacci cluster (see daily & hourly charts).
• The hourly (short-term) Stochastic oscillator remains bullish as it has inched up and still has some room left behind reaching its extreme overbought level.

Key levels (1 to 3 days)

Intermediate support: 10370

Pivot (key support): 10280

Resistance: 10630 & 10860

Next support: 10080

Conclusion

Short-term bullish view remains unchanged as the Index is still in the process of undergoing its potential “last push up” of the blow-off phase. As long as the 10280 daily short-term pivotal support holds, the Index is likely to see a push up to target the key resistance of 10630 with a maximum limit set at 10860.

On the other hand, failure to hold above the 10280 short-term pivotal support is likely to put the bulls on hold for a deeper slide towards the next support at 10080 (the ascending trendline from 08 April 2016 low @3am which also coincides with the former range top formed from 17March to 30 March 2016 now turns pull-back support).

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