DAX: New upward correction and then further down? – UBS column

Review: The situation in the DAX continues to cloud over. The index has been moving sideways since the beginning of June and can no longer gain any ground on the upside, despite numerous attacks by the bulls. The long sideways movement threatens to become the big top formation and with the price slide below the 50 EMA via gap down, another weak signal was generated the day before. Since the black monthly candle in July there is also a threat of a new decline in the 5-year chart. A black monthly candle was also formed in September and so far it looks like another bearish monthly candle for October. The DAX could face a lengthy decline.

Outlook: In the short term, the cops could counterattack after the price slide from the previous day and approach the upper open gap at 12,975 points. As a result, things are likely to go downhill again.

The short scenarios: As long as the DAX no longer manages to rise above 12,850 points, prices can be expected to fall further. The target of the bears would then initially be the upper limit of the old falling trend channel at 12,420 points, where the 200 EMA runs just below that at 12,400 points. If the price slide below the 200 EMA, the situation would also deteriorate in the long term. Then the next gap on the bottom could even start at 11,391 points from May 25th.

The long scenarios: The DAX can end the downward correction with the previous day’s low and rise again above the 50 EMA at 12,850 points. This would generate a short-term strength signal and a further run-up to the upper open gap at 12,975 points would be likely. As a result, the DAX is likely to turn down below the 50 EMA again.

Disclaimer: The text is a column of the UBS. 4investors is not responsible for the content of the column and therefore does not necessarily have to agree with the opinion of the 4investors editorial team. Any liability and claims are therefore expressly excluded by 4investors!


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