The last few trading sessions on the DAX, and beyond, have been rollercoaster. The prices, in fact, alternated important declines with fast recoveries. Therefore, should we buy the DAX index on the downside or take advantage of the rebounds to sell?
Surely the strong acceleration of the new infections linked to the Covid-19 pandemic should not favor the recovery of the stock markets. However, surprises are always around the corner and the only sure way to proceed is to follow the instructions of the graphical and forecast analysis step by step.
The suggestions of the graphical and forecast analysis: buy the DAX index on the downside or take advantage of the rebounds to sell?
The DAX index (quotes) closed the session on 2 October at 12,689.04 down by 0.33% compared to the previous session.
Since the last sessions have been characterized by a marked uncertainty, our Analysts have focused on the medium and long term trend.
Weekly time frame
In the medium term, the trend is bullish, but for several weeks it has failed to break up the resistance identified by the II price target in the 13,324 area. This failure could be very dangerous for the ongoing rally. The quotations, in fact, could face at least a retracement. To understand what will happen in the coming weeks, we need to carefully monitor the support in area 12.351. Its holding could help the bulls, otherwise it could go down at least to the 10.781 area.
DAX Index: ongoing bullish projection on the weekly time frame. The red oblique lines represent the Running Bisector levels; the horizontal lines the levels of The New Law of Vibration. The volume for each price level is shown on the left. The middle panel reports BottomHunter’s signal. The minimum on the considered time frame is marked when it is equal to 1. The lower panel shows the volume traded for each bar compared with a 20-period zero lag exponential moving average.
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Time frame mensile
In the long run, the situation is very similar to what we described in the weekly. In this case, the insurmountable obstacle is in the 13.142 area and could give rise to a double top with a target in the 10.000 area. A first indication of this would be with a monthly close of less than 11,757.
If, on the other hand, it continues to rise, the objectives are those indicated in the figure.
DAX Index: ongoing bullish projection on the monthly time frame. The red oblique lines represent the Running Bisector levels; the horizontal lines the levels of The New Law of Vibration. The volume for each price level is shown on the left. The middle panel reports BottomHunter’s signal. The minimum on the considered time frame is marked when it is equal to 1. The lower panel shows the volume traded for each bar compared with a 20-period zero lag exponential moving average.
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Deepening
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