German DAX – Bullish Flag

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The German DAX Index is likely to see further upside, following the larger sentiment in the global equity markets.

The index is down over 38% since hitting an all-time high of 13796 in February this year.

Following the drop to 8400, price action has found a floor around 23rd March and since then, price is in a reversal.

Prior to clearing the 10,000 mark, there was a consolidation on the daily chart, leading to a bullish flag pattern.

On April 6th, the DAX broke past the psychological barrier of 10,000 to close last week at 10654. The bullish flag pattern suggests that the minimum upside is at 11,600.

Therefore, following the breakout, the bullish flag is validated.

A potential retracement back to the 10,000 mark will create a good buying opportunity. While to the upside, the price level of 11,600 will mark the completion of the bullish flag pattern.

This view will be invalidated if the DAX slips below the 10,000 handle and closes below the previous pivot low of 9415.

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