Many analysts see greater value in European stocks than US stocks which have already risen significantly due to COVID induced central bank support. The majority of investors are also wary of a 5-10% correction in stocks that are seen as being due. So, if there is a sharp correction lower on a hawkish Fed this week then the DAX could offer great value at cheaper prices. Over the last 25 years, the DAX has risen 21 times between Oct 01 and Jan 01. The average rise has been 7.34% and the largest gain was in 1999 with a 31.73% rise. The largest fall was in 2008 with a large -14.35% loss. GER30 (DAX) failed to have enough momentum to stay above 15800 price action and were driven by a dovish rally towards our major support zone 15107 at 61.8% fibb retracement level. The exponential moving averages 50 and 200 in the four hourly time frame were proven to be too strong of a resistance to be breached by GER30 (DAX). 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

61.8% and 50% fibb retracement levels at 15107 and 14891 are major support zones with exponential moving average 200 providing a helping hand to the bulls and preventing GER30 (DAX) from losing any more gains. If the Fed are dovish this week, as expected, the DAX is unlikely to dip lower and the supporting technicals on the daily chart would provide another hawkish rally to GER30 (DAX). According to the elliot wave pattern, GER30 (DAX) is going for completion of bearish correction of higher degree before making any new record highs and we need to wait until the structure is completed. On the bearish side, if we get an impulsive closing below 14890 , this would lead GER30 (DAX) towards 14675 and 14407. 

GER30 (DAX)

Sep 20 2021

Stop Loss -2.45%

Holding time 15d9hr

15188.94

Entry price

14816.90

Stop loss price

1