DAX Reversed From 12869 Levels Yesterday

14 July 2020

DAX spot chart has been displayed here which is closed for now closed to 12800 mark. DAX futures had managed to rally towards 12369 levels yesterday, before bears took control back. The indice had reversed sharply towards 12525 levels around close.

DAX wave structure remains bearish until prices stay below 12920 mark and broadly below 13800 resistance. Let us have a re-look at the larger degree wave counts: The drop from 13800 through 8200 levels was an impulse wave, labelled as Wave (1) on the chart (not seen here).

An impulse is normally followed by a corrective wave, in the opposite direction. DAX had produced a counter trend rally between 8200 through 12920, which is labelled as potential Wave (2). If the above larger degree counts are correct, DAX should stay below 12920 and proceed lower.

Let us now have a look at potential lower degree wave counts: The drop from 12920 through 11600 was again an impulse (at a lower degree); which is labelled as Wave I on the chart here. Thanks to the fractal nature of markets; patterns are identical irrespective of the degree.

As expected, DAX produced a counter trend rally which potentially terminated around 12869 yesterday before reversing sharply lower. Please note that DAX was able to hold below 12920 mark, our potential Wave (2) termination point.

If the above lower degree counts are correct, DAX should stay below 12920 mark and continue lower towards 10300 and further as Wave (3) progresses. Traders might be inclined to hold short positions with a protective stop at 13800 and projected targets towards 10700, 9500 and beyond.

Prepared by
Technical Analysis Team

Disclaimer: This information has been produced by a third party, for general information purposes only, and is not indicative of future results. Abans Global takes no responsibility for its accuracy or completeness. Any opinions expressed do not reflect those of Abans Global. This information does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should seek independent advice before making investment decisions. Reproduction of this information, in whole or in part, is not permitted. Please note: If you are a Professional client, you are not eligible for negative balance protection and you could lose more than your initial deposit.

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