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DAX forecast for coming week ended 16th November, 2012.


Dax is in a position where it has the option of testing around 7000 levels but as we are seeing recent trends, it is not dropping much. In the last day its close was better from its low so it may again reverse from here. Last week I was not confident about creating probable bullish pattern and after this week it is technically out of that but the way Dax is moving in 7200-7400 range, we may get different options. I think if Dax tests 7400 range in the upside then that picture will be clear.

Dax is testing 7400 range during couple of months but during last couple of week it is making lower lows that is not a good sign. This week it faces 3 straight negative days though last day was better but if it again continues that trend in coming week then we may see it testing 7000 level.

If in coming few weeks Dax does not break 7400 ranges then there is a chance of change in environment. Long-term position of Dax is not totally clear, it has both the options open so taking a decisive call is difficult. If we go with long-term reversals then it may drop up to around 6730 level (around 50.0% reversal).

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This week was very good for Dax, though it is getting resistance at 8100 range. Now it has a chance to test downside again. I think even if Dax tests lower levels, it has more chance to bounce back from around 7800 range and therefore it will again test upside.

On the other hand if it shows flat movements around 8000 range in initial days of the coming week then there is a chance that it may take a decisive call in later days. Considering the recent trends it has the chance to test higher levels may be around 8200 but that will be a very aggressive call after taking in to account the movement from last December. I will worry about the downside when Dax will be testing levels below 7600 ranges.
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