dax due for a potential bullish breakout above 12390 1850552017

(Click to enlarge charts)

What happened earlier/yesterday

Since its new all-time high of 12485 printed on Tues, 25 April 2017, the Germany 30 Index (proxy for the DAX futures) has traded sideways.

Key technical elements

• The recent sideways movement from the current all-time high of 12485 has evolved into a “bullish flag” continuation pattern. This type of chart configuration tends to occur after a steep rally (the gapped up seen after the outcome of the 1^st round of French presidential election) where it takes a breather to consolidate.
• The shorter-term (hourly) Stochastic oscillator has flashed a bullish divergence signal which gives a pre-signal to indicate that upside momentum of price action has resurfaced.
• The key short-term support now rests at 12390 which is defined by the former swing high area of 03 April 2017, the lower boundary of minor ascending channel in place since 20 April 2017 and close to the 23.6% Fibonacci retracement of the recent rally from 20 April 2017 low to 25 April 2017 high.
• potential up move to materialise in the benchmark S&P 500 (refer to the last chart).

Key levels (1 to 3 days)

Pivot (key support): 12390

Resistances: 12550 & 12650

Next supports: 12210 & 12090

Conclusion

As long as the 12390 short-term pivotal support holds, the Index may see a potential bullish breakout to target the next resistances at 12550 and 12650.

However, failure to hold above 12390 may negate the preferred bullish tone to see a deeper slide towards the upper limit of the gap support at 12210.

Charts are from City Index Advantage TraderPro

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