The DAX Trading Opportunity

The DAX Trading Opportunity

We see a very clear technical pattern playing out. For several months the market traded sideways. It formed a defined range between support at the bottom and resistance at the top.

This consolidation built a strong base for future price movement.

Recently the price action changed significantly. Buyers pushed the index above the upper yellow resistance line.

We call this event a breakout.

It signals that bulls are in control. The price quickly rallied and hit the 50 percent Fibonacci extension level. That was the initial upside target.

Markets rarely move in straight lines forever. After the initial surge the price began to decline. This is normal market breathing.

We call this a pullback.

The price is now retesting the breakout level. The circled area on the chart highlights this specific action. Old resistance often transforms into new support.

This pullback creates a classic entry opportunity for traders.

It allows investors to join the existing uptrend at a favorable price. We are looking for buyers to defend this yellow line. The large volume profile bars on the right confirm many trades happened here in the past. This adds validity to the support zone.

Our focus now shifts to the upside potential.

We use Fibonacci extensions to project future price targets. The green arrow indicates the next major objective. This is the 100 percent Fibonacci extension level. A successful bounce from current support suggests a move toward the 26.000 price area.

The trend remains positive as long as this new support level holds firm.


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