The ACR target that I am talking about it 13,166-13,191. This price zone may not seem very significant, but when we consider the lack of pullback recently, it is an interesting one to observe. Of course, as with any technical analysis technique, sometimes the markets have their own path and ignore the forecasts.

Look at the chart below. Dax has just broken below this up-sloping centreline. But can you also see how the price has tagged the centreline from below? In addition, we can see that from the DAX continued to break below the lows of the day. So we have to wonder where it’s heading next.

So where is the DAX heading?

My answer is based on the ACR technique. You can find out more about that below. If this ACR line set is any good, then 166-191 is the target zone for the moment.

I get that number from the chart below. I am watching to see whether we have an example of action centred reaction.

What is ACR?

Action centre reaction (ACR for short) is a useful technique. It is a technique that allows you to forecast potential targets when you are trading.

The technique is based on the idea that for every action there is an opposite and equal reaction. For our example we are looking at a bullish ACR line set.

To draw the bullish ACR line set, you start by drawing your centreline. A good centreline is often an upsloping trend line. The centre line will often connect the lows and price will hold those lows.

Once you have your centreline you then see action which is an acceleration away from the centre line. Action is often seen as unusual price action compared to what has come before that. In our case it was the bullish spike that you can see which eventually created the high of the day. That is our action point.

So we have a centreline and we have an action point. We can now draw a parallel of the centreline and place it at the action point (or the high of the day in our case). That is what the top line of the three is showing.

The final step is to draw a third line which is a parallel of the other two. This final line will be equally distant away from the centre line. So measure how far away the action point is from the centre line. The reaction line (the lowest of the three) will be the same distance below the centre line.