A medium-term target of 9799 in still in place for the DAX though more upside is possible in the short-term, according to Andy Dodd, Head of Technical Research at Louis Capital Markets.
Following a break below the neckline of a head-and-shoulders pattern in October, Dodd’s target for the DAX is 9799 (see Chart). A bullish ‘Hammer’ candlestick posted in the last week of 2018, however, suggested the move lower was stretched and a return towards the neckline was possible.
Dodd notes that another Hammer candlestick was posted last week, which underlines the potential for short-term upside. As such, his overall preference is to sell rallies back towards the neckline.