Pullback Expected in German DAXLike most other major indices, the DAX has also reached new highs in recent months. Currently, the chart pattern is tempering overly bullish enthusiasm: the last bull surge was met with significant sell-offs by the end of the trading session, and the RSI in the daily chart is showing clear bearish divergence. Not only is the RSI showing these divergences, but also the Moving Average.
Therefore, we are holding off on long entries for now and expect a correction to the area around 16,810 points. Here, we would enter long positions again and anticipate further upward movement towards around 17,550 points.
Subsequently, in our estimation, a significant correction is likely to follow, potentially bringing the DAX to new yearly lows.