- 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.
- The DAX 30 made a strong bullish breakout above the 21 ema zone. The breakout seems to be a wave 3 if price action is able to make a bounce at the 21 ema zone.
- The main targets are located at the -27.2% Fibonacci level around $15,743 and the -61.8% Fibonacci target at $15,918.
Can the bulls keep control or is the uptrend already completed? Let’s review the Elliott Wave patterns.
Price charts and technical analysis
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.
