dax daily outlook tues 16 feb 2016 just below intermediate risk zone of 9300485 1797422016

(Click to enlarge charts)

What happened yesterday

The Germany 30 Index (proxy for the DAX futures) has continued to push higher but it is now approaching an intermediate risk zone (resistance) of 9300/485.

Key elements

• The Index has continued to push higher since last Friday low of 8696 and based on its current price of 9262, it has surged by 6.5% without a pull-back. It is now hovering just below the former range support of 9300/485 (now turns pull-back resistance) that gave way to the steep decline seen two weeks ago on 04 February 2016.
• On the shorter-term, the 9300/485 pull-back resistance zone also confluences closely  with the 3.618/4.236 Fibonacci projection from 11 February 2016 low of 8696 to 11 February 2016 high of 8877 @10pm projected from 12 February 2016 low of 8746 @12 February 2016 and the 50% Fibonacci retracement from the recent drop from 28 January 2016 high to last Thursday, 11 February 2016 low.
• Based on the Elliot Wave Principal and aforementioned Fibonacci projection levels, the Index is likely coming close to complete its bullish wave iii of a minute degree (short-term) within a five waves bullish impulsive structure in place since 11 February 2016 low. The wave iii extended potential targets stands at 9300/400 and 9485 which are derived from 3.618 and 4.236 respectively. These observations suggest that a potential minor pull-back wave iv is eminent at this juncture.
• In addition, the hourly (short-term) Stochastic oscillator has inched up and reached its extreme overbought level which suggests limited upside potential.
• The near-term support rest at the 9090/40 zone which is defined by the pull-back support of the descending channel bullish breakout of the lower boundary of the short-term ascending channel in place since last Thursday, 11 February 2016 low.

Key levels (1 to 3 days)

Intermediate resistance: 9300/340

Pivot (key resistance): 9485

Supports: 9090/40

Next resistance: 9840

Conclusion

The Index now faces the risks of a minor pull-back below the 9485 short-term pivotal resistance towards the 9090/40 support zone. On bias for the medium-term remains bullish for a potential countertrend rally that has yet to be ended as per highlighted in in our latest weekly outlook/strategy published yesterday (click here for details).

On the other hand, a clearance above the 9485 short-term pivotal resistance is likely to invalidated the minor pull-back scenario to see a further extension of the current rally towards the next resistance at 9840 (minor swing high of 01 February 2016).

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