DAX jumps after breakout as European stocks extend rally

Gregor Horvat Wavetraders

DAX is making a strong rebound, and price has even gapped higher after breaking above the upper line of the channel. This suggests that the current move could be an extended wave three or even wave C, and in both cases, we should be aware of more upside, as this leg should unfold in five waves. At the moment, price is testing resistance around 24100 to 24364, where we could see a short-term pullback. However, after a near-term retracement, we would expect further upside toward the 25000 area, where we also have a gap from March 2nd.

Overall, it looks like an important bottom may be in place, and more gains could follow. However, if price drops back below 23400, then the higher degree correction from the January highs may still be ongoing.

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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