dax daily outlook wed 30 sep potential push up towards short term range top 1444872015

(Click to enlarge chart)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has tumbled directly (without any bounces) to hit our expected downside target at 9320 (weekly pivotal support).

Please click here for a recap on our previous daily outlook.

Key elements

• The Index has managed to stage a bullish breakout from its former short-term trendline resistance joining the “lower highs” since 18 September 2015 @2am now turns pull-back support (in dotted green) at 9420.
• The next significant short-term resistance stands at 9715 which is the range top in place since 23 September 2015 high @4pm follow by 10000 which also confluences closely with the 61.8% Fibonacci retracement of the down move from 09 September 2015 high @2pm to the 29 September 2015 low @2pm.
• The hourly (short-term) RSI oscillator has broken above its former resistance and the 50% neutrality level. This observation suggests that short-term upside momentum remains intact as the RSI still has room for further upside before reaching its extreme overbought level.

Key levels (1 to 3 days)

Pivot (key support): 9420

Resistance: 9715

Next support: 9320 (weekly pivot)

Conclusion

Short-term technical elements have turned positive. As long as the 9420 daily (short-term) pivotal support holds, the Index may see a further push up to target the short-term range top at 9715

On the flipside, a break below the 9420 pivotal support is likely to invalidate the short-term bullish tone for a slide to revisit the 9320 weekly pivotal support.

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