DAX
Dax index bounced from the recent lows just in time to keep the series of higher lows intact. Therefore, the bullish bias persists while above 14,000 points and threatening to break horizontal resistance. When the market hesitates against horizontal resistance but keeps forming a series of higher lows, it means that an ascending triangle, as a continuation pattern, forms.
Once again, the Dax index followed closely the price action seen in the United States. The U.S. stock market corrected at the start of the week, only to reach new highs once Fed’s Chair testified Tuesday and Wednesday. As a consequence, the Dow Jones broke above 32.000 points to a new all-time high, so the Dax followed the price action closely.
However, just like previously, while the U.S. stock market indices keep making new all-time highs, the Dax is unable to do so. Until it manages to clear and hold above resistance, bears may still have a case.
Bulls may want to wait for the breakout before going long. Ideally, they should wait for the Dax to break and close on a daily basis above the horizontal resistance. Next, bulls may want to go long with a stop at the previous higher low and target the measured move of the pattern given by its longest segment projected from the breakout point.
