Good morning traders and welcome to the German DAX 30 Outlook!
I’m still in shock at the incredible flow of money into German equities, especially with the incredible perils of financial meltdown only partially covered up. Sweeping things under the carpet doesn’t work, but as traders I guess we capitalize on and work with whatever situations are presented to us.
Some analysts predict Dax will get to 14k maybe even 15k assuming similar percentage gains to that of the SPX. Others bring us back to the Greece issue. The fact remains that low bond rates are pushing more people into equities and with ECB buying up billions every month, I suspect the trend will continue. Corrections and pullbacks will provide opportunities to buy more positions. If you are long, consider taking profits temporarily. If you are short, then be cautious of further moves before the correction happens.
This week I will be trialing a premium piece of software that will attempt to dynamically provide support & resistance based signals across all time frames. Screenshots and analysis will be provided below, initial signs are encouraging, I just want to see whether it’s another money pit or whether any value can be extracted from it.
My personal opinion: I think we have room to go higher and I am still Bullish. I am watching for pullback levels to buy and accumulate.
German DAX 30 Outlook – Support & Resistance
| KEY LEVELS | Difference | |
| Daily R2 | 11461 | 48 |
| Daily R1 | 11423 | 154 |
| Daily Pivot | 11363 | 347 |
| Daily S1 | 11325 | 453 |
| Daily S2 | 11265 | 646 |
| 24hr VWAP | 11344 | 77 |
| Naked VPOC | 11338 | 17 |
| Value High | 11356 | 23 |
| Value Low | 11303 | 74 |
| 200 Day EMA | 9887 | 35 |
| 34 Hour EMA | 11310 | 74 |
Daily German DAX 30 Outlook – Chart Analysis
Slightly concerned with the over valued nature of the market at the moment, but will ride it as long as I can. We have touched the rising trend channel top and are threatening the fork top as well. The oscillators are over 70 but we have seen these overbought levels before so I am beginning to ignore them. There was an interesting volume spike on Friday, which can usually, not always, point to the start of a reversal. Strong argument for a correction soon, or at least a pullback. At this rate, we are looking at having to amend the trajectory of the bullish channel to fit price action and that starts to reek of bubble.
Daily German DAX 30 Outlook Intra-day Analysis (30 minutes)
I have highlighted a buy zone for my first swing long. I wouldn’t be surprised if we took off towards 11500 before reaching the 11k zone again, but I think somewhere near 11k is reasonable for a pullback. I am happy to enter a long there to test for a bounce. If we go deeper, I will consider cutting and adding from lower levels. See below for more reasons why I like this level.
German DAX 30 Outlook Intra-day Chart Analysis (5-minutes)
I have highlighted a few areas of support/resistance based on 4-hour fractals and I like the 11076 which is a previous area of short-term support as it also currently sits at the 50% retracement level from the recent swing. I like this as an almost perfect balance point right now, which could provide a decent high probability setup for a long position, if we do get a pullback.
German DAX 30 Outlook Intra-day Chart Analysis (1-minute)
Not much to go into here, except to see the daily pivot levels and a simple rising trend channel, which we are currently in the bottom half of.
Volume Profile Chart Analysis
Low volume pocket right beneath us, but the area has proven stubborn to break. Mark the area on your chart as it could provide quick points if 11378 is broken (11356-11375 is the low volume area). Another option would be that we can not break the area and build higher from here. The previous days low volume pockets are still valid.
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