DAX In Depth

The index managed to return to the upside wave after it settled for the 23.6% correction supported by the 50 MA as seen over weekly basis above. The index set consecutive daily closing above the support for the medium term trend confirming the resumption of the general upside trend.

The path seems open towards the previous recorded top around 6345.00 which meets the neckline for a proposed bullish pattern shown above.
The main ascending channel in addition to the positive signals from Stochastic and the 50 MA all support that the index will manage to breach the neckline and head further to the upside with targets starting from 6670.00 and then farther ahead at 7000.00.
We should note that weekly closing below 6120.00 will extend the bearish correction and reverse the short term trend to the downside targeting 5690.00; breaching the latter will take the index towards the 38.2% correction around 5286.00.

By: Yasir Mubarak
Main Technical Analyst