The next big challenge for the DAX is 12,000

As the DAX continues to push higher, where are the next key resistance levels on the charts? The next key psychological level is 12,000 points.

Trader on the phone beside a DAX sign
Source: Bloomberg

December saw Germany’s blue-chip index finally manage to break above the 10,780-10,830 resistance zone, after trading sideways for several months. It had to retest November’s intermediate high of 11,435 several times, but now these two important milestones have been cleared the psychologically important ‘round number’ of 12,000 is within view.

In front of this goal on the technical charts, the horizontal trendline is running at around 11,800, but should 12,000 be broken this would not be the end of the party on the Frankfurt stock exchange. Other targets will be the former upward trendline, which is below 12,165 points at the beginning of January, and the 2015-record high at 12,400.

Since the break from the sideways trading zone at the beginning of December, there haven’t been any corrections lower. Any breather after the recent climb would not be surprising and would not signal a broken trend from a technical point of view. On the contrary, investors could use any pullback to get started.

In the medium-term, the DAX has more than five support levels that could serve as corrective targets. In the case of a consolidation, 11,435 points would be the first resting place, while a shift zone was created around 11,401 to 11,484 points. The rising weighted 10-week moving average currently stands at 11,325, the horizontal trend line at 11,142/11,166, the crucial previous resistance zone at 10,780 to 10,830, and the weighted 40-week smoothing line at 10,705.

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.