dax daily outlook tues 15 mar 2016 a potential downleg looms at the 10100280 risk zone 1801892016

(Click to enlarge charts)

What happened yesterday/earlier

The Germany 30 Index (proxy for the DAX futures) has managed to recover from the post ECB’s sell off as it staged a rally of 6% to print a high of 10041 yesterday, 14 March 2016.

 Key elements

• Interestingly, the current push up in price action is now coming close to the “risk zone” of 10100/280 (resistance) which is defined by a confluence of elements (for more details, click over here as per highlighted in our latest weekly outlook/strategy published yesterday).
• The 4 hour Stochastic oscillator has exited from its overbought region and still has room for further potential downside before reaching its extreme overbought level. On the 1 hour time frame, the Stochastic oscillator has reached its oversold region which suggests the price action of the Index may see a minor push up first before a potential downleg occurs.
• Significant short-term supports now rests at 9860 follow by 9700 which is defined by the 23.6% Fibonacci retracement from the start of the countertrend rally cycle from 11 February 2016 low to yesterday high of 10041.

Key levels (1 to 3 days)

Pivot (key resistance): 10100/280

Supports: 9860 & 9700

Next resistance: 10390 (weekly pivot)

Conclusion

Any potential push up in the Index is likely to be capped by the 10100/280 short-term pivotal resistance for a potential downleg to test the 9860 support before targeting the next support at 9700.

However, a clearance above the 10100/280 short-term pivotal resistance may put the bears on hold to see a “residual” squeeze up towards the “excess” at 10390 (weekly pivotal resistance).

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