DAX can bounce back strongly when it hits this level
7th November 2018 08:50
by Alistair Strang from Trends and Targets
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Just like other indices on the continent, the German DAX has taken a nose dive. Chartist Alistair Strang takes a look at Frankfurt's interesting recovery potentials.
DAX Germany (DBI:DAX)
When we last reviewed The Dax in October, the index was around 12,000 points and we predicted a drop to 11,100. It achieved target successfully and from our perspective, the stunning projection deserved a merit badge or something.
There are a couple of noteworthy items regarding the fall. Firstly, it exceeded our drop target by 70 points. Secondly, perhaps more important, it did not close below 11,120 points and thus, our secondary of 10,314 is not yet a certainty.
But if the index finds any reason to trade below 11,050, further drops become extremely likely. And worse, 10,314 is only our initial target!
If broken, 7,500 becomes viable.
At present, the index requires trade above 11,985 just to signal the German market has bottomed. An event such as this allows for 12,500 initially allegedly.
Even if bettered, we're not confident our secondary at 13,100 will prove valid, thanks to the extremely well defined dark blue downtrend from the start of this year.
In summary, we suspect 10,314 shall eventually make an appearance. The market should then exhibit reasonable bounce symptoms.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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