DAX

Briefly

Published 7th December 2017 & validated 18th December 2017

We forecast a brief spike to the downside before the Dax reverses into a continuation of its trend to the upside. On a bigger picture we see the Dax in an upside trend that is part of a secular bull market. The secular bull market started in 2011 after the Dax spent 11 years in a sideways correction. Our Dax technical analysis results into higher German stock prices for at least a major part of the following decade.

Market Pulse

Published 18th December 2017

The expanding triangle, which we’ve counted here is still possible but close to a do or die situation. The Dax is following the major US American indices and very close to a breakout. The US majors are about to oben with a gap up. There is actually quite a case for a year end rally if the S&P trades swiftly up to 2,700. In that case we see the Dax rushing swiftly towards 13,500 points and shifting odds heavily towards the red count.

We would expect the Eurostoxx 50 as well as the CAC 40 to confirm this bullish setup in order to change our base case to the red count. Their respective contracting triangles should break down. For the moment we stick with the black count and expect a reversal to the downside.

Dax Technical Analysis Short Term

Published on 13th November 2017 & validated 18th December 2017

Our Dax technical analysis concludes continuation to the upside after we finish the current correction. This may be either now or after a new low as part of a complex correction structure that started early November 2017. Why do we not think that the entire intermediate wave (1) is already completed at early November top? This scenario seems a bit early if one looks at the setup of the US and Asia’s main indices. Moreover some other European indices seem to trace out as well impulses at intermediate level and some need a bit more upside until a new high forms the final fifth wave. On top of that we get into some seasonality around year end. There is always a maybe… but we see it less likely at the moment! It is too early to call the end of intermediate wave (1) in the Dax.

We expect the Dax index to complete its intermediate wave (1) early 2018. We see wave 4 of (1) to be shallow and simple due to alternation to wave 2, which we see as deep and complex and label as an irregular flat.

The termination of wave (1) at the November 2017 all-time high would become more probable if:

  • he light blue trend channel support and resistance gets taken out
  • momentum (macd, rsi) accelerate to the downside
  • we receive cross market confirmation from other European indices taking out key support and resistance levels

Dax Technical Analysis Medium And Long Term

Published October 19th and validated 18th December 2017

In the medium timeframe the Dax index has completed a contracting triangle of cycle degree. It has started from the peak of the tech bubble in early 2001 and finished in 2011 with a breakout to the upside. We expect to see cycle wave V in the coming years. This should lead to a bull market for at least a part of the next decade. Triangle breakouts are usually swift. From a technical analysis perspective a right look of the entire wave structure would develop if we see a cycle wave V in the magnitude of at least 38% in comparison to the previous cycle waves.

Technical Analysis