TecDAX is a stock index which tracks the performance of 30 largest German companies from the technology sector. Even though these enterprises are of a high economic importance, their market capitalization and the book order turnover are far below of that of the DAX index. The TecDAX is related to DAX in a similar way like NASDAQ is related to Dow Jones Industrial Average index.
From technical perspective, NASDAQ has been the strongest index in the US. As a matter of fact, it has provided high rewards for those traders who were buying the dips for more upside. One of the features of the market behavior is that weak indices remain weak and strong indices remain strong. The fact that NASDAQ has been outpacing other US indices makes it a good candidate to buy it again once the indices turn higher again. Similar strong uptrend can be also seen in a behavior of TecDAX. This index, therefore, allows entering the German technology sector by providing investors and traders with high returns and protecting them, at the same time, from the defaults originating from trading of single stocks.
In the initial article from September 2020, we were calling for an extension higher within the cycle from March 2020 lows to the new highs. We were right. Now, we see a larger correction taking place. Current pullback should provide an opportunity for an acceleration higher.
TecDAX Monthly Elliott Wave Analysis 11.01.2022
The monthly chart below shows the TecDAX index $TDXP listed at Frankfurt Stock Exchange. From the all-time lows, the index price has developed a cycle higher in wave (I) of a super cycle degree. It has ended in November 2007 at 1060.35. From there, a correction lower in wave (II) has retraced part of the rise by printing a bottom in March 2009 at 387.50.
In 2013, TecDAX was able to make a higher high opening up a bullish sequence. As a matter of fact, it has extended from March 2009 lows far beyond 1.618. Therefore, the cycle higher is an impulse in blue wave (III). It has reached 3051.44 highs in September 2018. From the top, a correction lower has unfolded as an expanded flat which has found its bottom in March 2020 at 2127.05.
From the March 2020 lows, we have broken to the new all-time highs confirming an extension in the blue wave (V). In November 2021, the top of the cycle in black wave ((I)) has been set at 4010.04. Now, a pullback in black wave ((II))) against the all-time lows should find support in 3, 7, 11 swings. Then, a new larger rally in black wave ((III)) of grand super cycle degree should take place. The target will be 4010.04 highs and even beyond.
TecDAX Daily Elliott Wave Analysis 11.01.2022
The daily chart below shows in more detail the $TDXP price action from the November 2021 highs. The consolidation in black wave ((II)) unfolds as a double three structure. Firstly, blue wave (w) has ended in March 2022 at 2895.03 lows. Then, a bounce in blue wave (x) has set a connector the same month at the 3393.53 highs. Finally, blue wave (y) has broken the 2895.03 lows opening up a bearish sequence. Now, the price should continue lower towards 2281 and lower.
Investors and traders can be looking to buy $TDXP from 2280.42-1591.34 area. There, an acceleration higher in black wave ((III)) or a bounce in 3 waves as minimum should take place.
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