dax daily outlook wed 09 sep pull back before new potential rise above 1032010250 support 1249892015

(Click to enlarge charts)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has managed to stage a push up and hit our expected upside target at 10320.

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

Key elements

• Price action has reintegrated back above pull-back resistance of the former descending channel bearish breakout which has invalidated further potential downside movement since the start of 20 July 2015 (see 4 hour chart).
• The intermediate support stands at 10320 which is the pull-back trendline (in dotted green) (see 1 hour chart).
• The  hourly (short-term) Stochastic oscillator has exited from the overbought region and still has room for further downside before reaching its extreme oversold level. This observation suggests the risk of a pull-back in the price action of the Index (see 1 hour chart).
• The next significant resistance stands at 10650 which is defined by the 07 July 2015 swing low and the 1.382 Fibonacci projection from 02 September 2015 low @3am to 05 September 2015 low @2am (see 4 & 1 hour charts).

Key levels (1 to 3 days)

Intermediate support: 10320

Pivot (key support): 10250

Resistance: 10650

Next support: 9960

Conclusion

Technical elements are still positive despite the current strong upside movement seen. However, do expect a potential pull-back first towards the key short-term support zone of 10320/10250 before another upswing materialises to target the next resistance at 10650.

On the other hand, failure to hold above the 10250 daily pivotal support is likely to damage the bullish tone to see a decline towards the next support at 9960.

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