Last week I was talking that if Dax does not able to maintain 7340 levels in early days then there is a chance that it may drop.
Though it did form bearish lower tops but now I think that it may not react like a bearish pattern, in fact it may take couple of more days to continue this moves and looks like that it may break-out from that in coming week. Dax is making these short-term lower tops in medium-term upward market (or descending triangle) then that generally signifies well but there is no guarantee. Even if we consider that the break-out will be in the upside even then I don’t think that it will be a big one, unless Dax breaks out 7500-7600 level convincingly a new bull run is not expected from here.
Long-term position of Dax is not totally clear, it has both the options open so taking a decisive call is difficult. I do not know for sure whether Dax is waiting for a break-out in the upside or it is going to react on that short-term bearish pattern, if that pattern triggers then Dax may test around 7000 level. On the other hand if we go with long-term reversals then it may drop up to around 6600 level (around 61.8% reversal).
NOTE: Please see the disclaimer of this blog.