Dax Outlook Week 05

No new lines added to the chart this week, as it seems we have enough lines on the chart Smile.

Last week the uptrend continued and even got slightly steeper (when looking at the lows). The Dax broke through the resistance at 6484 and went straight towards the 38% Fibonacci level at 6597, which derives from May to September downmove in 2011.

The VDAX dropped further to 21, RSI got even more overbought and the MACD is a little less bullish.

For week 05 I would like to see a little correction to take some heat out of the market. Technically the Dax should fall back to around 6300 as a pullback in the recent uptrend. The EMA also signal a more bullish outlook for the medium term. On the other hand I think the whole debt crisis is not over yet and we could see a couple of sharp breakdowns. There are also signs of slowing world economy and then the markets could only rise further with more QE packages.

I think the market is at an interesting decision point now and we will see the market pointing out the longer trend in the coming 2 months.