☝️ DAX Bullish Bounce Makes Triangle ABCDE Pattern Likely ☝
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Hi traders,
The German index DAX30 made a bullish bounce at the support trend line (blue) and bottom of triangle chart pattern. This analysis discusses 2 main scenarios.
DAX
Day
This version assumes that the current bullish price action is a pullback for a more downside and later on a bearish break. In that case there would be an extended wave 3 (brown) within a wave C (orange). See the 4 hour image for more details.
Day 2nd version
The other scenario is that price made a bullish bounce as part of a triangle chart pattern, which is indicated by the ABCDE (pink). In that case price is expected to build a bullish ABC (purple) within wave D (pink) now.
4 hour
If the bearish breakout is indeed correct (1st image), then price will not break above the 50-61.8% retracement levels of wave 4 vs 3. A break above these Fibs makes a wave 4 unlikely and the triangle pattern becomes the most favourite pattern. A break below support would confirm a potential bearish wave 3 pattern. At the moment, however, a triangle pattern seems to be more likely.
Good trading,
Chris Svorcik
Elite CurrenSea
