Steve O’Hare from First 4 Trading believes that the recentrally on the DAX will push the index to a new all-time high. Price momentum onthe DAX has largely been bullish since Q3 2011. The rally is expected tocontinue due to signals of a bearish butterfly formation. A symmetricaltriangle pattern has already been created. Steve notes that this technical convergencetypically pushes prices higher during the final leg of the bearish butterfly formation.

Therefore, Steve is predicting a move past the key psychological10,000 level towards 10,340-400 points. To make the most of this potential tradeopportunity, he suggests buying at current levels and again at 9,600. Initiallyhe is targeting 10,100 points followed by a more aggressive target of 10,350points. A stop can be placed at 9,375 points. The duration of this trade is oneto three weeks.

Join theconversation below to be a part of the social trading experience.

Non-independentinvestment research disclaimer

Full disclaimer