Short term Elliott wave view in DAX suggests the rally from January 28, 2021 low is unfolding as a 5 waves impulse Elliott Wave structure. Up from January 28 low, wave 1 ended at 14169.49 and pullback in wave 2 ended at 13664.71. The Index extends higher in wave 3 towards 15501.84 and pullback in wave 4 is currently in progress.
Internal of wave 4 unfolded as a zigzag Elliott Wave structure. Down from wave 3, wave ((a)) ended at 15071.78, bounce in wave ((b)) ended at 15354.36. Wave ((c)) has reached 100% – 161.8% Fibonacci extension of wave ((a)) and expected to complete soon at 14662.91 – 14927.27. Near term, expect a wave (iv) bounce followed by another leg lower in wave (v) before Index completes wave ((c)) of 4. Index should then extend to new high in wave 5 or bounce in 3 waves at least from the blue box.
For this view to remain valid, DAX should not go below 161.8% Fibonacci extension at 14602.91. If the Index breaks below this level, there’s a risk that the decline from April 19 high becomes a 5 waves down and thus opens further downside.
