DAX has an open path to further increases

The German DAX attacked the area of ​​15400 points, testing the highest levels in a month. However, this is not the end of the growth. The technical situation on the chart suggests increases of up to 16000 points.

The Frankfurt stock exchange continues to rise on Tuesday. DAX Index attacked the level of 15400 points., breaking above last week's highs and is currently testing the highest levels in a month. Everything indicates that this is not the end of the growth. After that at the end of October DAX made a decisive upward turn, ending the downward correction that had been ongoing since the end of July, and then in the first days of November it opened a wide bullish gap of 14923,27 - 15033,65 points, returning above the low from the beginning of October, now the over 3-month high was broken. downtrend line. Thus, the DAX has an open path to the area of ​​16000 points.

All these demand signals are confirmed on the DE40 daily chart. At the end of October, the chart made a sharp upward turn from the lower limit of the 3-month descending channel, which was preceded by upward divergences of the chart from MACD indicator. The second demand signal was the return above the local minimum from October 4 (14944,89 points), which was accompanied by preliminary buy signals on the indicators.

However, really strong buy signals on the daily chart appeared only in recent days. First, DE40, despite already being clearly overbought in the short term, returned above its 50-day average on Friday. Today, however broke out of the descending channel with the top, confirming all demand signals generated in the last 3 weeks.

DAX daily chart (DE40). Source: Tickmill

The breakout of DE40 above from the descending channel is a harbinger of growth towards the holiday peak. Stock market bulls on their way they will only encounter two significant resistances. The first is the 200-day average, which currently creates a barrier of 15647 points. and above the local maximums from August and September, i.e. the zone 15990,93-16044,06 points. However, these are not significant enough supply barriers to stop buyers.