DAX in a small correction mode

The German stock market has been overbought in the recent weeks. Two days ago the correction began. At this moment it is only a small consolidation.

Source: Bloomberg

The DAX has been testing the support at 11,861/11,853 (the two former highs from the 11th and 12th of March). The next supports are the lower upward trend channel line at 11,750, the 21 days moving average (EMA) at 11,631 and finally the 23,6% Fibonacci retracement at 11,600.

The consolidation could continue for several days. Above the all-time high at 12,221 from mid of March the correction would be over. The technical target price is at 12,830. This is where the upper upward trend channel line on daily basis is. 

German stock market DAX on daily basis

Source: IG Charts

The DAX shows a nice big picture on monthly basis. From the technical point of view we see further potential to the long term upward trend channel line at 12,930. The upward trend line at 11,200 is a strong support.

The well known indicator MACD (Moving Average Convergence/Divergence) has been showing an intact buy signal since November last year. Other indicators e.g. the 200-days (MA) are positive, too. So the DAX could continue the journey to higher price levels.

German stock market DAX on monthly basis

Source: IG Charts

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