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Featured Trade: DAX recent rebound has reached a key inflection zone

Short-term technical outlook on DAX (Tues 12 Feb)



Click to enlarge charts

Key technical elements

  • The Germany 30 Index (proxy for the DAX futures) has staged a 2.7% rebound from its recent 08 Feb 2018 minor swing low of 10862 to print a current intraday high of 11156 in today, 12 Feb European opening session. The current intraday high of this rebound has aligjned closely with a Fibonacci cluster at 11150/185 (61.8% retracement of last week’s slide from 05 Feb 2019 high to 08 Feb 2019 low & 1.00 expansion of the current push up from 08 Feb 2019 low to 11 Feb 2019 high projected from 11 Feb 2019 European session low of 10971).
  • The aforementioned Fibonacci cluster also coincides closely with a minor graphical resistance at 11205 (the former minor range top from 01/05 Feb 2019) (see 1-hour chart).
  • In addition, both the 4 and 1-hour Stochastic oscillators have reached their respective extreme overbought levels which increases the probability of a mean reversion in price action of the on-going rebound from 08 Feb 2018 low.

Key Levels (1 to 3 days)

Pivot (key resistance): 11205

Supports: 11045, 10960 & 10870

Next resistances: 11310 & 11390 (medium-term pivot)

Conclusion

The recent rebound seen in the Index is now coming close to a significant inflection zone and if the 11205 key short-term pivotal resistance is not surpassed, its price action may see a decline to retest the near-term supports of 11045 follow by 10960 with a maximum limit set at the 08 Feb 2019 minor swing low area of 10870.

However, a clearance above 11205 invalidates the bearish scenario for a further squeeze up towards 11310 and even the lower limit of the key medium-term pivotal resistance zone at 11390.

Charts are from City Index Advantage TraderPro



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