dax daily outlook thurs 01 oct bullish tone remains intact above 97109580 support 1453472015

(Click to enlarge chart)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has rallied and hit our expected upside target at 9715.

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

Key elements

• The Index has managed to stage a bullish breakout from a short-term  “Double Bottom” bullish chart formation (as depicted by the light-blue boxes) with its pull-back support at 9710.
• The next significant resistance stands at 10000/10080 which is defined by the trendline resistance (in pink) joining the highs since 09 September 2015 @2pm and a Fibonacci cluster (61.8% Fibonacci retracement of the down move from 09 September 2015 high to 29 September 2015 low @2pm + 1.00 Fibonacci projection from 29 September 2015 low @2pm to 01 October 2015 low @12am.
• The hourly (short-term RSI) oscillator is coming close to its extreme overbought level but no sign of a bearish divergence signal. This observation suggests that upside momentum for the Index remains intact.

Key levels (1 to 3 days)

Intermediate support: 9710

Pivot (key support): 9580

Resistance: 10000/10080

Next support: 9360

Conclusion

As long as the short-term significant support zone at 9710/9580 holds, the Index may still see a potential push up to target the 10000/10080 resistance.

However, a break below the 9580 pivotal support is likely to invalidate the bullish expectation for a slide to retest the 9360 “Double Bottom” support.

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