DAX Faces Resistance Around 12900 Mark

29 September 2020

DAX has managed to regain some of its earlier losses as the indice pushed through 12800 levels yesterday. Futures have managed to touch 12900 today as bulls recovered from its last week’s lows around 12340 spot. Bears remain inclined to take control from here.

DAX has managed to keep the classic Elliott Wave pattern 5 Waves Down, followed by 3 Waves Up intact for now. The indices had dropped from 13800 highs through 8200 lows in March 2020, subdividing into 5 waves.

This was followed by a counter trend rally A-B-C (3 Waves) towards 13500 levels through September 2020. If the above structure holds well, DAX should produce yet another 5 waves lower towards 8000 and lower in the next several weeks.

Also note that the corrective wave had rallied through fibonacci 0.88 retracement of the earlier drop Wave (1) on the chart here. The termination has been marked as Wave (2) and potential Wave (3) might be underway towards fresh lows.

Furthermore, the counter trend support trend line has been breached and bears might remain inclined to carve lower lows and lower highs until 13500 remains intact. The next in-line support is seen towards 11600 and bears might be poised to take that out.

Traders might be inclined to hold short positions taken earlier around 13300 levels and also add further at 12900/13000 resistance zone. Protective stop would still remain above 13800 mark while projected targets point towards 8000 mark.

Prepared by
Technical Analysis Team

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