DAX: Short break after break out

Earlier this week the upper trend line of the short-term downside trend channel at 11,585 was broken up significantly


. At the same time the German Stock market leapt over the 55 days exponential moving average (EMA) at 11,644 and Fibonacci retracement (23.6 per cent) at 11,695.

The DAX has generated a new buy signal on daily basis. Target price is the psychological price level at 12,000. Above this resistance the German blue chips could continue the upward trend to the highs at approximately 12,400 from April 2015.

After the trend reversal we see a typical pull back to the former resistances at 11,695/11,644. Further support is the trend line at 11,454/11,467. This mentioned level was tested several times.

German stock market DAX on daily basis

DEM_DAXchart 210115
Source: IG Charts

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