Bearish signal on DAX if it breaks below T1 trendline
DAX index failed to reach last week the highs of 27th of Octomber and, most likely, formed the corrective wave [ii] as a part of the 5 wave impulse move towards the mid-september lows.
The channeling of wave 2 (composed of [a], [b], [c] sub-waves) shows the importance of T1 trend line. This will basically give further evidence of wave 3 developing.
Although maybe it’s too soon, I will take my chances in saying that the end of wave 3 will take place well below the mid-September lows in the 4,970 area.
A possible future scenario is plotted on the 4h chart and the most important aspect to follow is a consolidation in the 5,000-5,500 area as a wave [iv] is likely to form there.
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