GER30 moved smoothly in accordance to our analysis published on 20th Sept by activating our buying signal over the indice at 15188 and providing us a strong touch down at 15768 - missing our targeted destination just by a few pips. Currently the GER30 is hovering above one of our key price action zones and resistance turned support 15411, a closing below would simply drive the indice towards 61.8% fibo retracement level 15107 i.e our major support zone. According to fundamentals, the German election brought a narrow victory for the Social Democrats (25.7%), but no outright majority, which means the country is now facing lengthy coalition talks. Indeed, the liberals and the Greens together have more seats than either of the big two and it seems they will dictate the momentum now, with signs that they will first talk to each other before entering discussions with either the SPD or the CDU/CSU faction. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

As with most European indices, the DAX tested the second support level and then reversed to the upside.

As in the second half of July, the index after a strong selloff is consolidating between the 9MA and 50MA: we believe that this consolidation phase will initially lead it to test, and then to break, the resistance level at 15,736.

The Dax 40’s tentative break below the major support at 15050 weighs on traders’ risk appetite. Unless the bulls can push back and absorb offers at 15780, the index could be vulnerable to a deeper correction.

An overbought RSI has caused a stall in the recovery. A bearish MA cross may attract selling interest. 15400 is an important gatekeeper and a breach could trigger a sharp sell-off to 14900. 

We advise our viewers to take an exit from the GER30 trade and wait for our confirmation unless a breakout is found below 14891 i.e 50% fibo retracement level. We are bullish on the indice until it maintains its accumulative behavior above 61.8% and 50% fibo zones. 

GER30

Sep 28 2021