DAX Forecast: Index Continues Choppy Behavior Around 15,000

Christopher Lewis

It is obvious that the market favors the upside.

The DAX Index rallied a bit on Friday as we continue to see strength, but ultimately, we are simply trying to figure out whether or not we are going to finally launch. This is a market that should continue to see plenty of buyers, as the DAX is the “blue-chip index” for the entire continent. Pullbacks should be supported at the 50-day EMA at the very least, and I think when we are looking at this chart, we should be thinking about buying only. If we break out above the highs of the trading session on Friday, then I think we will go pressing the 16,000 level. The 16,000 level is an area where we would see psychological resistance, and the fact that we formed a bit of a shooting star in that area does not hurt the cause either.

Looking at this chart, I think that we will continue to see a lot of noisy behavior, but it does not take a lot of imagination to draw a symmetrical triangle currently, and that typically means that we are winding up for some type of bigger move. If that is going to be the case, then I think we look at a scenario where the market not only reaches about 16,000, but based upon the measured move could be looking at a move towards the 16,250 level.

To the downside, if we were to break down below the 50-day EMA, then it is likely we will go looking towards the 15,500 level, which is a large, round, psychologically significant area that a lot of people will be paying close attention to. If we break down below there, then the market is likely to see a lot of downward momentum to reach towards the 15,000 handle. The 15,000 handle currently looks as if the 200-day EMA is racing towards it and will end up being the bottom of the overall consolidation area, so I think at this point we are looking at the 15,000 level as the “floor in the market.” Anything below there would be disastrous for the DAX. I do not think we will get there anytime soon, and it is obvious that the market favors the upside.

DAX Index

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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