DAX 30 Testing 38.2% Fib Support In ABC Correction

The German stock index DAX 30 made a bullish bounce within wave E (orange) as expected. This completed a wave 4 (grey) pattern and restarted the uptrend.

Can the bulls keep control or is the uptrend already completed? Let’s review the Elliott Wave patterns.

Price Charts and Technical Analysis

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The DAX 30 made a strong bullish breakout above the 21 ema zone:

  • The breakout seems to be a wave 3 (orange) if price action is able to make a bounce at the 21 ema zone.
  • A bullish bounce around the 21 emas could indicate a wave 4 (orange).
  • The waves 4 are usually complex and lengthy so a bearish ABC (blue) pattern is typical.
  • A bearish bounce (orange arrow) at the previous top could indicate a wave B-C (blue).
  • A bullish bounce at the previous bounce could restart the uptrend (blue arrow).
  • A deep retracement invalidates this wave outlook (red circle).

On the 1 hour chart, price action seems to be developing a bearish ABC (green) pattern:

  • A bearish push towards the 38.2% Fibonacci retracement level could complete wave C (green) of wave A (blue).
  • The outlook remains bullish as long as price action stays above the 50% Fibonacci level.
  • A deep bearish retracement could indicate a different wave outlook (red and orange circles).
  • The main targets are located at the -27.2% Fibonacci level around $15,743 and the -61.8% Fibonacci target at $15,918.

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