dax daily outlook tues 02 feb 2016 potential push up towards symmetrical triangle range top 17958420

(Click to enlarge charts)

What happened yesterday

The Germany 30 Index (proxy for the DAX futures) has continued to trade sideways above our current medium-term pivotal support at 9600 (click here for more details on our latest weekly outlook/strategy published yesterday).

Key elements

• In the shorter-term, the Index has started to evolve into a “Symmetrical Triangle” range configuration (depicted by the pink coloured trendlines) since the high of 28 January 2016.
• Current price action is coming close to the lower limit of the “Symmetrical Triangle” which is just above the 9600 medium-term pivotal support. The upper limit (resistance) of the “Symmetrical Triangle” is capping the Index at the 9810 level.
• The hourly Stochastic oscillator is now at its oversold region which coincides with the price action hovering just above the “Symmetrical Triangle” support. These observations suggests a potential upturn in price action of the Index.
• The next short-term resistance stands at 9880/9935 which is defined by the minor swing highs of 28 January 2016 and 15 January 2016 that has yet to be surpassed.

Key levels (1 to 3 days)

Pivot (key support): 9600 (medium-term)

Resistance:  9810 & 9880/9935

Next support: 9300

Conclusion

Current technical elements suggest another round of sideways movement within the “Symmetrical Triangle” range configuration. As long as the 9600 pivotal support holds, the Index may see push up to test the upper limit (resistance) of “Symmetrical Triangle” at 9810. Only a clear break above 9810 is likely to trigger a further upside movement to target the next resistance at 9880/9935.

However, a break below the 9600 pivotal support is likely to invalidate the on-going mean reversion rally for a further decline to test the 9300 critical range support.

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