Featured Trade DAX potential fresh impulsive downleg

Short-term technical outlook on DAX/Germany 30 Index (Thurs 28 Mar)

Key technical elements

The recent rebound of 2% seen on the Germany 30 Index (proxy for the DAX futures) from its Mon, 25 Mar low of 11270 has reached a significant short-term resistance at 11500 which is defined by the former minor swing low area of 21 Mar 2018 and a Fibonacci retracement/expansion cluster (38.2% retracement of the recent slide from 19 Mar 2019 high to 25 Mar 2018 low & 1.236 expansion of the push up from 25 Mar low to 26 Mar high projected from 26 Mar 2019 minor low).
Since its 25 Mar 2019 low of 11270, the price action of Index has evolved into a minor “bearish flag” range configuration with its support at 11380.
The 4-hour Stochastic oscillator has started inch down from its overbought region coupled with the 1- hour RSI oscillator that remains bearish below its resistance at the 50 level. These observations suggest a revival of short-term downside momentum of price action.

Key Levels (1 to 3 days)

Pivot (key resistance): 11500

Supports: 11380 & 11260

Next resistance: 11650 (key medium-term pivot)

Conclusion

If the 11500 key short-term pivotal resistance is not surpassed and a break below 11380 is likely to reinforce the start of another potential impulsive downleg to target the next near-term support at 11260 in the first step.

However, a clearance above 11500 negates the bearish tone for an extension of the rebound to test the 11650 key medium-term pivotal as per highlighted in weekly technical outlook report published earlier on Mon (click here for a recap).

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