dax daily outlook thurs 08 oct 9890 is the short term support to watch for a potential push up 15168

(Click to enlarge charts)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has inched higher and tested the 10080 pivotal resistance before staging a retreat in the late European session.

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

Key elements

• Yesterday’s price action has led to a bullish breakout of the former descending channel (in pink) in place since 09 September 2015 now turns pull-back support at 9890 .
• The pull-back support at 9890 also confluences with the 23.6% Fibonacci retracement from 02 October 2015 low @9pm to the recent 07 October 2015 high @10pm (the minimum corrective wave 4 target based on the Elliot Wave Principal and a potential bullish reversal may occur from this juncture)
• The daily (medium-term) RSI oscillator has just broke above its former resistances and the 50% neutrality level. These observations suggest that upside momentum has resurfaced.
• The hourly (short-term) Stochastic oscillator has dipped back on its extreme oversold region which suggests a potential upturn in price action is round the corner.
• Based on inter-market analysis, the Asian major stock indices, Nikkei 225 and Hang Seng Index have staged a bullish breakout above their former weekly pivotal resistances (Nikkei 225 = 18130 & Hang Seng = 22260 respectively). Even though, the German 30 remains below the 10080 weekly resistance, the conviction is now low for the medium-term “last push down”  scenario to retest the “Black Monday” 24 August 2015 low of 9320.

Key levels (1 to 3 days)

Pivot (key support):  9890

Resistance: 10080

Next support: 9780

Conclusion

As long as the 9890 daily (short-term) pivotal support holds, the Index is likely to see a push up to retest the 10080 weekly pivotal resistance.

On the contrary, a crack below the 9890 pivotal support may negate the expected bullish upturn for a deeper slide to target the next support at 9780 (former minor swing high of 01 October 2015 @2pm).

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.