The German 30 index (cash) is in a breathing distance from February’s record high of 13,826 after finally breaching the tough resistance bar of 13,460.
The technical picture continues to look constructive for additional gains as the red Tenkan-sen line is sloping upwards again after refusing to cross below the blue Kijun-sen. In other indicators, the MACD is strengthening above its red signal line, while the rising RSI and the fast-Stochastics are also reflecting a bullish bias, though some caution should be warranted as the latter is set for a bearish cross above its 80 overbought mark.
Running beyond record highs, the index may initially test the 14,000 psychological mark before propelling towards the 14,180 number – being the 261.8% Fibonacci extension of the 13,455 – 13,000 downside correction (look in the four-hour chart).
Should the bears retake control, the area between the red Tenkan-sen line at 13,400 and the 13,160 barrier will be closely watched as any step lower would downgrade the outlook back to neutral. Beneath that zone, traders will also keep an eye on the restrictive 12,912 level, where the 50-day simple moving average (SMA) is currently lying.
In brief, the German 30 index is looking set to unlock new record highs as the bias remains strongly bullish.
