The Dax 30 index, has been under pressure over the last few days, but as the new week starts it looks like buyers are making a serious attempting to carve out a low. At 8 am London time the DAX index soared by 75 basis points, but two hours later the price has slid to a new daily low. Yet, bearish traders are finding it challenging to control the price, and the price is once again up from the lows. If the price trades above today’s high I suspect that the DAX 30 would have bottomed out.
The bullish reaction should not come as a surprise to investors given that the index is bullish for the year, and from June the price has been creating steady higher lows. The sequence of lows that I am watching starts with the June low at 11598, followed by a low at 11986 on June 18, trailed by a higher low at 12174 on June 25. As long as the price trades above the June 25 low the trend will remain bullish, and it would not surprise me if the DAX 30 reaches the year-to-date high at 12663, followed by the inverse head and shoulder target around the July 2017 high at 12893. I spotted this inverse head and shoulders pattern in March.
Time will tell if the DAX 30 manages to bottom out at current levels, but using the Fibonacci levels from the June 25 low to the YTD high we can see that the price is finding support just above the 78.60% correction level, so it is prime time for the DAX 30 to trade higher.Don’t miss a beat! Follow us on Twitter.