DAX
The Dax index continues its bullish run after an ascending triangle broke higher in February. Moreover, another continuation pattern appeared on the charts recently, a bullish flag, and its measured move hints to 16,000.
News that an Asian hedge fund received a margin call last Friday did not stop investors from bidding for higher stock market prices. In fact, the Dow Jones in the United States reached a new all-time high, and so did the Dax index.
Furthermore, the euro, the common currency, remains weak, trading below 1.1750 against the dollar. Effectively, the bearish price action on the EUR/USD exchange rate bodes well for the Dax index.
It is hard to argue with the price action on the charts. When an ascending triangle breaks, the previous resistance turns into support. Until the price reaches the measured move, the market rarely revisits the support level, just as seen on the chart below.
As for the bullish flag, the measured move points to a quick move higher, ideally in less than the time it took for the consolidation in the flag to form. Bulls may want to stay on the long side with a stop at the lowest point in the flag and a take profit at 15,800 or beyond.
