dax daily outlook wed 21 oct en route towards 10380 1627662015

(Click to enlarge charts)

What happened yesterday

Despite yesterday’s early sell-off in the Germany 30 Index (proxy for the DAX), it has managed to hold above the 10070 daily pivotal support and staged a recovery in the late European session.

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

Key elements

• In the shorter-term, the Germany 30 Index (proxy for the DAX) has traded in a series of “higher lows” since 15 October 2015 low. It Is now evolving within an ascending channel with its support at 10120.
• The significant resistance remains at 10320/10380 which is defined by the neckline of the impending bullish “Double Bottom”, the upper boundary of the aforementioned short-term ascending channel (in dark blue), the upper boundary of the longer-term ascending channel from the 29 September 2015 low (in orange as depicted on the hourly chart) and the 5^th wave target of 1.00 time of the length of wave 1 projected from the low of wave 4 (9888) seen at 14 October 2015 @3pm based on the Elliot Wave Principal.
• The hourly (short-term) RSI oscillator remains bullish above its trendline support and 50% neutrality level which suggests that the upside momentum remains intact.

Key levels (1 to 3 days)

Intermediate support: 10120

Pivot (key support): 10070

Resistance: 10320/10380

Next support: 9890

Conclusion

Technical elements are still bullish in the short-term. As long as the 10070 daily (short-term) pivotal support holds, the Index is likely to stage a rally to target the key resistance at 10320/10380.

On the other hand, a break below the 10070 pivotal support is likely to invalidate the “last push up” scenario to see the start of a deeper pull-back towards the next support at 9890.

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