After the five ascending moves, the DAX index has found s short-term top. In this post, we’ll review what could the next move be in the following days. To better view the chart, please click on the arrowed square at the top right of the charts.
The Big Picture
The German index DAX 30, is developing a bullish cycle started on the last week of 2018. The price has found a short-term top at 12,435.67, from where DAX began to make a corrective move. The RSI oscillator has found support at the 40 level. This move suggests that the area between 11,722.30 and 11,538.75 could act as a support zone.
Expecting a Complex Corrective Wave
In the DAX 2-hour chart, we observe that the price developed a simple corrective move on Feb. 2019. In this sense, by the Alternation Principle, the next path expected for the German index should be a complex corrective sequence. In consequence, our bias for DAX 30 is neutral
Remember that a complex correction is a combination of the different simple corrective patterns. For more information about corrective waves, you can visit the following articles:
- Understanding the Corrective Waves is Key to Succeed.
- Understanding corrective waves – Part II – Triangles and Trading Setups.
- Understanding corrective waves – Part III – Strength and complexity.
- Understanding Corrective Waves – Part IV – Combinations.
Remember that the price is not forced to move as our outlook proposes. The charts released corresponds to a Technical Analysis application.