DAX
Dax Index had a strong bounce from Friday’s laws as it climbed all the way back to the key resistance area at 14,100. A daily close above this area should be bullish medium to long term because the Dax may have formed an ascending triangle. However, without such a break, the possibility still exists that the Dax may form a triple top – the price to be rejected three consecutive times from a horizontal area.
The first two trading days of the week brought nothing but a reversal of the last two days of the previous week. In other words, ranging markets, a typical feature during the Non-Farm Payrolls week.
Yesterday, Germany announced yet another extension of its lockdown caused by the coronavirus health crisis. While the economy suffers, investors prefer to think ahead and focus on the imminent economic recovery once the pandemic gets under control.
The triple top possibility remains a valid one as long as the market does not close above the 14,100 level. A key level to watch to the downside is a break of the rising trendline. On such a break, investors will push for more as per the triple top measured move.
All in all, the Dax index still coils, building energy for a breakout – bullish or bearish, it remains to be seen.
