The Dax index had a terribly confusing month so far. Both bulls and bears tried to push against resistance, respectively support, with little or no success.
As such, the technical picture remains a true mess. On the one hand, bears call for a double top around the 15,600 level, but there is no continuation on any attempt to break lower. On the other hand, the consolidation took place on the horizontal, which is typically a bullish sign, as most continuation patterns consolidate like this.
This year in September, there are elections in Germany. The polls suggest a tight race between the Greens and the CDU while the world waits for the next chancellor that will replace Angela Merkel. For the German Dax index this means only uncertainty, so one should not be surprised to see more of the same.
Dax Index Technical Analysis
From a technical perspective, the simplest way to trade the current range is to wait for a daily close outside its upper or lower levels. More precisely, bulls should wait for a close above 15,600 before going long with a stop at 15,000 and a risk-reward ratio of 1:2. On the other hand, bears should wait for a close below 15,000 before going short with a stop at 15,600 and a take profit level calculated using a risk-reward ratio of 1:2.
Dax Index Price Forecast
Follow Mircea on Twitter.