DAX Rebounds Strongly After False Breakout

In today’s technical analysis, let’s take a look at the German DAX — where a major reversal is unfolding that looks highly promising for buyers.

What happened here is a textbook case of a false breakout. The index initially broke down from the blue pennant formation and slipped below the crucial red trend line, sparking fears of a deeper decline. But this move proved to be short-lived. Price quickly reversed direction, surged back above the red line, and climbed higher into the heart of the pennant.

This recovery transforms sentiment. A false breakout often leads to strong moves in the opposite direction, and in this case, the buy signal is clear. The last obstacle for the bulls is the black downtrend line, which has been connecting lower highs since mid-August. A breakout above this resistance would fully confirm the bullish scenario and open the door for further gains.

For now, the sentiment on DAX is positive, and traders are watching closely for the next breakout to fuel momentum.

Source: https://www.axiory.com/analytics/technical-analysis/dax-rebounds-strongly-after-false-breakout