dax weekly outlook 07 sep to 11 sep elements remain mixed 1230472015

(Click to enlarge charts)

What happened last week

The German 30 Index (proxy for the DAX) has traded in a sideways configuration in light of the recent European Central Bank (ECB) monetary meeting and U.S. non-farm payrolls employment data release.

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

Key elements

• The Index has continued to trade above the long-term key support zone of 10013/9600 defined by the 34-month Moving Average (in red), ascending trendline (in orange) joining the lows since 11 September 2011 and the 38.2% Fibonacci retracement of the up move from 11 September 2011 low to 05 April 2015 high (see monthly & weekly charts).
• The weekly (long-term) Stochastic oscillator has exited from the oversold region and still has further room for upside before reaching its extreme overbought level (see weekly chart).
• The Index is still below the pull-back resistance of the medium-term descending channel bearish breakout (in purple) now at 10320 where the recent push-up from the “Black Monday”, 24 August 2015 low has stalled (see daily & 4 hour charts).
• The next significant resistance stands at 10650 which is defined by the previous 08 July 2015 swing low and close to the 50% Fibonacci retracement of the recent down move from 20 July 2015 high @4pm to 24 August 2015 low @8pm (see daily & 4 hours).
• The short-term trendline support joining the lows of 02 September 2015 @12 am and 05 September 2015 @12am is now at 10000 (see 4 hour charts).

Key levels (1 to weeks)

Resistance: 10320 & 10650

Support: 10000 & 9600

Conclusion

Technical elements are still mixed. We remain neutral without any directional bias with adjusted levels at 10320 and 10650.  Only a clearance above the 10320 intermediate resistance is likely to trigger a push up to target the 10650 level in first step.

On the flipside, a break below the 10000 support may see a slide to retest the key long-term support at 9600.

Source:  Charts are from eSignal & City Index Advantage Trader

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