DAX: Frankfurt begins a new downward leg

The DAX may return to 14,000 points in the short term

This new bearish outlook will be reinforced in the event of a drop below the 20-day moving average. The last time the DAX broke below the parabolic SAR indicator and its 20-session moving average after rebounding more than 15% (April and August), this marked the start of a new leg down to new low yearly lows.

The first support to see will be the symbolic threshold of 14,000 points which blocked the DAX in August, then the Fibonacci retracement threshold of the recent bullish rally at 13,218 points. Longer term, a return to October below 12,000 points and new annual lows are likely to be expected given the growing risk of a global recession.

Entry: Sales below 14,500 points

Stop: 14,700 points

Goal: 14,000, then 13,200 points

Risk/reward ratio: >2

Follow the development of the DAX 40 price with IG.

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