DAX Challenging 2015 Levels, CAC 40 Correction Looks Over
- DAX breaks out…finally
- Top-side levels in play
- CAC 40 looks to resume higher after ending corrective phase
Finally, the DAX, after three weeks of consolidation it broke free, and with an exclamation point. The 1.8% rip took the DAX to the first level of resistance we have on our charts at just over 11800. Today, it’s working on moving to the next level around the 11920 mark. These levels come by way of a series of lower highs created during 2015 on the descent from record levels. On a move beyond 11920, we will then look to 12079.
In the very short-term, caution is warranted for establishing new long positions given how strongly the market has rallied in the past couple of sessions; a prudent approach is to wait for a pullback/consolidation on the intra-day time-frames (1,2-hr time-frames). A pullback and hold around 11802, the first level of resistance now turned support, may offer a good spot for traders looking to take on a long.
After coming very near the trend-line off the November low, the CAC 40 is turning higher, ending what looks to have been a corrective decline off the very early month highs. We noted on Tuesday the channel developing off the 1/13 high, and that a break above the upper parallel may indicate the pullback is over; it looks as though that is the case. With continued strength, the 1/3 & 1/13 peaks in the 4924/30 vicinity present the next level of resistance the market needs to overcome to continue the advance. A break above those highs lends to a move towards the 5k mark, where lies peaks from late-2015 along with the upper parallel belonging to the trend-line off the June lows. As long as the market stays corralled within the confines of the channel extending back to November, the CAC will remain postured constructively.
CAC 40: Daily