DAX is ready for a countermovement

Regarding the last high at 9891 Mid of September the German stock market has lost approximately 1000 points. The DAX is now oversold. A technical rebound is possible. 

bg_german_stock_exchange_1369821
Source: Bloomberg

The German blue chips reached the support at 8982/8952 on the 8th of October. But this trend line was not broken down. This was very important for the DAX. The mentioned price level was already tested in March and August this year.

The oscillator Relative Strength Index (RSI) with the parameters 21 days and the oversold and overbought levels at 40 and 60 shows an oversold situation. Above the level at 40 the DAX could start an improvement. Target price would be the former support at 9345/9435.

However the technical situation is difficult. The DAX remains in a sideways movement. A new buy signal would be generated above the resistance at 9800. Currently this scenario is not realistic. 

German stock market DAX on daily basis

Daxchart10092014
IG Charts

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.