DAX is testing a strong resistance above the historical high of 17100. A break above this resistance will open a new strong bullish cycle but we are seeing a terminal phase of the long-term and short-term Elliott Waves. If we get a rejection and a confirmed break below 16100 and it sustains lower we can call five upside waves finished. A break above 17100 will open the doors for a bullish extension.
The Weekly DAX chart reveals the rising price action wedge and a test of its upside resistance and an already mentioned key level of 17100. A break below 16800 is required to invalidate the immediate upside extension and will not mark the fifth wave higher finished, but will lead to a deeper correction. It is advisable to position yourself in just one trade direction and not to try to catch every swing. If we get a break below 16100 it will mark the five waves upside finished and will lead to a bigger reversal lower.
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As the famous trader says…
“Don’t worry about what the markets are going to do; worry about what you will do in response to the markets.”Michael Carr
How to trade this?
It is a fact that a strong upside resistance for Q1 2024 is 17100. If we get a confirmed break here we could see a strong upside continuation and a test of 17500. Near-term, short-trade entries have a higher probability of success but for the conservative traders upon a break below 16600. Long trade entries are possible as well but only on a price action confirmed break above 17100. You can try a short trade here with a stop loss above 17200 and if you will be stopped out then reverse to long. For the inquiries about account management please write to [email protected].
