dax daily outlook tues 01 mar 2016 right at ascending channel support for a potential push up 179936

(Click to enlarge chart)

What happened yesterday

The Germany 30 Index (proxy for the DAX futures) has shaped a 2.4% pull-back in price action from the 9580 short-term range top. Interestingly, this decline has managed to stall at the 9340 intermediate support as per highlighted in our latest weekly outlook/strategy published yesterday (click here for a recap).

Key elements

• The Index is evolving with a bullish ascending channel in place since 11 February 2015 low (start of the on-going countertrend rally). Yesterday, pull-back in price action has drifted close to the lower boundary (support) of the ascending channel at 9330/285.
• The hourly (short-term) Stochastic oscillator has just started to exit from its oversold region which suggests a revival in upside momentum after yesterday’s decline in price action.
• The next significant short-term resistances after the 9580 range top stands at the 9680/785 zone which is defined by the 76.4/1.00 Fibonacci projection of the current rally from 24 February 2016 low of 9123 to 26 February 2016 high of 9577 projected from yesterday low of 9347.  Based on the Elliot Wave Principal, these Fibonacci projections are used to gauge the potential 5^th wave target (ending level) of the bullish  wave 1 of wave c/ that started from 24 February 2016 low of 9123.

Key levels (1 to 3 days)

Pivot (key support): 9330/285

Resistances: 9580 & 9680/785

Next support: 9120 (weekly pivot)

Conclusion

As long as the 9330/285 short-term pivotal support holds, the Index is likely to shape another potential push up to assault the 9580 range top and breaking above it may open up scope for a further rally to target the next resistance at 9680/785.

However, failure to hold above the 9330/285 short-term pivotal support may negate the bullish tone to see a further slide to test this week medium-term pivotal support at 9120.

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