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The German stock market could soon generate a new technical buy signal. For this scenario, the DAX should close above an important downward trendline (in red) that’s been in place since April 2015. It currently stands at 10,550 on the monthly chart. The closing price at end of August, 10,587, was not a significant break above the trendline.
The DAX now has another chance to overcome the downward trendline at 10,430 in September. In this case, the German stock index could move to the psychological price level at 11,000 – at which point we would be looking at subsequent trendline resistance, currently at 11,470.
If it fails to break above the descending trendline, support in the region of 10,116/10,048 and at 10,000 could be tested. As a result the German stock market would be back in the primary downward trend.