DAX it is Preparing for a New Rally
|DAX 30, in its 4-hour chart, shows a consolidation structure, which looks like a pennant pattern. According to the traditional technical analysis, a pennant is a chartist figure implying a continuation of the previous movement. In this case, the primary trend corresponds to a bullish move that started in early January.
A long position will be activated if the price breaks and closes above 13,459.7 pts. This breakout could drive the German index until 13,546.1 pts, as a conservative scenario.
If the buying activity continues enlarging this potential upward leg, DAX could visit as a possible second target at 13,636.0 pts. The last potential bullish target is located at 13,727.1 pts.
The invalidation level of our bullish scenario locates at 13,369.3 pts.
Trading Plan Summary
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Entry Level: 13,459.7 pts.
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Protective Stop: 13,369.3 pts.
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1st Profit Target:13,546.1 pts.
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2nd Profit Target: 13,636.0 pts.
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3rd Profit Target: 13,727.1 pts.
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