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DAX: Glimmer of Hope That The Pattern May Improve

Monthly time frame:

  • Likewise major stock indices the decline is corrective and the slope of the 10 mma is negative, which is suggesting that the trend is down and the DAX is at least retracing the advance from the September 2011 low
  • Since the pattern from the April 2015 is most likely not completed yet, the DAX will probably test in the weeks/months ahead the firmness of the support of the double top break out (year 2000 / 2007). It will be a major test and if the trend line from the March 2009 low is not breached the overall pattern would remain encouraging and may improve.

DAX Monthly Chart
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  • Potential long-term EW count: The current decline is the second wave (B) of a Double Zig Zag

DAX Monthly Double Zig Zag Chart
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  • Monthly oscillators are suggesting that selling momentum remains strong, although Stochastic is approaching the oversold line. The MACD has a bearish cross in force but so far remains above the zero line

DAX Monthly Momentum Chart
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Weekly time frame:

  • The decline from the April 2015 top is corrective. Maybe the DAX is unfolding a Double Zig Zag.
  • If DAX is unfolding a Double Zig Zag the current rebound is the second wave (B)
  • The potential target box for the assumed wave (B) could be located in the range 9908 (horizontal resistance) - 10388 (0.618 Retracement)

DAX Weekly Chart
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  • Weekly oscillators: The Stochastic is oversold and the RSI displays positive divergence. Hence a larger rebound is probable (The RSI could tag the trend line resistance)

DAX Weekly Momentum Chart
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Daily time frame:

  • If the trend line from the December 2015 high is breached then odds should favor the scenario of a wave (B) rebound
  • If this is the case then we could establish three potential targets: T1 = 9849 (50 dma) - 9904 (Horizontal resistance); T2 = 10125 (Horizontal resistance); T3 = 10387 (0.618 Retracement)
  • If the scenario of a larger rebound is correct the 10 dma should not be breached

DAX Daily Chart
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  • Daily oscillators are aligned with higher prices ahead. The RSI has breached its trend line resistance and it is reclaiming the 50 line and the MACD has a new bullish signal cross

DAX Daily Momentum Chart
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