Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Chart Of The Day: DAX Bulls Ready For Breakout Towards All-Time Highs

By Fawad RazaqzadaStock MarketsJul 03, 2020 11:09
uk.investing.com/analysis/chart-of-the-day-dax-bulls-ready-for-breakout-towards-alltime-highs-200443590
Chart Of The Day: DAX Bulls Ready For Breakout Towards All-Time Highs
By Fawad Razaqzada   |  Jul 03, 2020 11:09
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

It has been a good few days for risk and as another week draws to a close, the major stock indices are looking quite bullish, despite ongoing concerns over the coronavirus situation in the US. Sentiment remains supported by several factors, not least improving global economic data, as lockdown measures ease across most parts of the world.

Indeed, the strong showing in US employment was the trigger behind Thursday’s rally. Today, we’ve learnt that China’s services activity expanded at its fastest pace in over a decade last month, according to the sector’s PMI. Activity within the European services industry also topped expectations, with Spanish flash PMI unexpectedly rising above the boom/bust level of 50, while the French, German and Eurozone PMIs were all revised higher. 

However, with the US markets closed in observance of Independence Day, it may be a quieter-than-usual session. Still, the major European equity indices look quite strong and the latest Chinese and European services PMI data could provide fuel for the rally to continue, even without the participation of US investors. 

Meanwhile from a technical point of view, the German DAX looks rather constructive, compared to some of its European counterparts, as it closes in on this year's record highs. 

Daily DAX Technicals
Daily DAX Technicals

 The chart of the DAX futures shows a clear breakout on the daily time frame after the recent consolidation was resolved on Thursday, by the index moving above its resistance, rather than the support, trend line. Meanwhile, the 21-day exponential moving average has also crossed above the 200-day simple MA, which is an objective way of confirming the bullish trend. 

Now, the point of origin of the breakout is at 12385/90 on the daily time frame. This level needs to hold for the bulls to sustain control of price action. While above here, any short-term retracements should not worry the bulls on Friday or early next week. 

However, a move back below 12385/90 would put the bulls in a spot of bother, as this would provide an early indication that the breakout may have failed. And the buyers would be in real trouble if the recent low prior to the latest rally, breaks. That low comes in at 11925. If the index were to move below here, it would also see the longer-term bullish trend line break. So, needless to say, that would be a bearish development, if it materialized.  

But for now, the path of least resistance is to the upside. As such, I expect the dips to be supported and resistances to continue giving way.  Talking about resistance, one hurdle that was being tested at the time of writing was at 12590. If and when we cleanly break above this, then the recent high at 12933 will come into focus next, above which there is nothing too significant until the pre-lockdown, and all-time, high at 13824. 

Chart Of The Day: DAX Bulls Ready For Breakout Towards All-Time Highs
 

Related Articles

Edison Group
RTW Venture Fund Limited: Initiation Of Coverage By Edison Group - Jan 12, 2022

RTW Venture Fund (LON:RTW) (RTWVF) is managed by healthcare specialist RTW Investments (RTW), which was founded in 2009 by Dr Roderick Wong. It has an innovative approach, focusing...

Chart Of The Day: DAX Bulls Ready For Breakout Towards All-Time Highs

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
dean wrighton
dean wrighton Jul 05, 2020 4:03
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I agree very good article
Kyle Stuart
Kyle Stuart Jul 03, 2020 14:10
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Great article Fawad.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Continue with Google
or
Sign up with Email