dax daily outlook thurs 12 nov maintain potential push down scenario below 1093010990 resistance 175

(Click to enlarge chart) What happened yesterday The Germany 30 Index (proxy for the DAX) has pushed up, tested and reacted off the 10990 pivotal […]


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By :  ,  Financial Analyst

DAX (1 hour)_12 Nov 2015(Click to enlarge chart)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has pushed up, tested and reacted off the 10990 pivotal resistance as expected.

Interestingly, the push up in price action happened before ECB President Draghi’s speech and the sell-off of 82 points took place after his speech is being concluded.

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

Key elements

  • The 10990 level remains the key pivotal resistance to watch. It is defined by the former trend support (in dotted dark blue) now turns pull-back resistance and the 76.4% Fibonacci retracement of the recent down move from 06 November 2015 high to 10 November 2015 low @6pm.
  • The hourly (short-term) Stochastic oscillator has inched back up into its overbought region which suggests limited upside potential for the price action of the Index at this juncture
  • The short-term support to watch will be at 10700/10670 which are defined by the swing low of 27 October 2015 , 23.6% Fibonacci retracement of the start of the bullish impulsive wave in place since 29 September 2015 low to the recent 06 November 2015 high of 11058 and the 1.00 Fibonacci projection from the 09 November 2015 high @10am to 10 November 2015 low @6pm projected from yesterday, 11 November 2015 high @8pm.

Key levels (1 to 3 days)

Intermediate resistance: 10930

Pivot (key resistance): 10990

Support: 10700/10670

Next resistance: 11220

Conclusion

As long as the 10930/10990 key short-term resistance zone is not surpassed, technical elements are still in favour of a corrective (bearish) move to retrace the bullish impulsive wave structure from the 29 September 2015 low to the recent high of 11058 printed on last Friday, 06 November 2015. The potential short-term downside target remains at 10700/10670.

However, a clearance above the 10990 pivotal resistance may invalidate the corrective (bearish) movement for a squeeze up towards the next resistance at 11220.

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.

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