DAX
The German Dax index recently broke higher after an ascending triangle formed at the 14k level. The breakout, as expected, gave bears no chances, as the market squeezed higher in a vertical move.
However, at the current levels, the Dax index looks vulnerable. Make no mistake, the price action remains bullish, as the market keeps the higher highs and higher lows series, but bears may give it a shot on the short side as a small reversal pattern forms.
Europe still struggles with the rollout of the vaccine. When compared to the United Kingdom or the United States, the European Union struggles with getting its people vaccinated. On the one hand, not enough vaccines exist, and on the other hand, people are reluctant. As such, the advance is slow, a third wave of infections reached most European countries, and the economies will suffer as a consequence.
Germany just announced yesterday that it extends its lockdown to the middle of April, while other countries took similar measures. The Euro summit at the end of the trading week will try to answer all these problems, as well as to find a solution.
The stock market remains bid and Dax as well. Therefore, any trade on the short side should be viewed as a contrarian trade, riskier than usual. Bears may want to stay on the short side, targeting the horizontal base of the previous ascending triangle while having a stop-loss order at the 15,000 level.
