Dow Jones, Nasdaq 100, DAX 30 Forecasts: Bullish
- The Dow Jones and Nasdaq 100 trade near record levels with minimal resistance overhead
- The DAX 30 enjoyed a remarkable surge to start February but has since stalled near prior highs
- Stock Market Forecast: Earnings and Volatility Set to Continue in February
Dow Jones Technical Forecast
Outlook: Bullish
The Dow Jones returned to record levels last week after undergoing turbulence in late January. While the fundamental landscape and market sentiment have shifted in recent weeks, the longer-term technical outlook remains constructive despite recent volatility. Still, the Dow will need to avoid breaking beneath a few key trendlines if it is to continue its gradual climb higher.
Dow Jones Price Chart: Daily Time Frame (January 2018 – February 2021)
To that end, support along the ascending trendline projection from March can be viewed as pivotal landmark for the Industrial Average as a break beneath could see the Dow extend lower. Aside from the March trendline, a rising trendline from January 2018 may play a role in the shorter-term as the Dow looks to overtake recent highs. Should bearishness return, the level might offer some semblance of support.
Still, the longer-term technical landscape remains encouraging as recent volatility failed to pierce any of the longstanding trendlines and resistance is essentially nonexistent apart from the index’s record highs.
Nasdaq 100Technical Forecast
Outlook: Bullish
The Nasdaq 100 finds itself in a similar position, trading at record levels headed into the week. A series of ascending trendlines have offered influence at various stages, but the common theme throughout is their bullish nature. While the tech-heavy index may continue to bounce between them on an intraday basis - creating opportunities for traders utilizing shorter range-trading strategies - the longer-term takeaway is that a continuation higher seems likely.
Nasdaq 100 Price Chart: 4 – Hour Time Frame (October 2020 – February 2021)
Pullbacks may serve as healthy consolidation as the series of higher-highs and higher-lows looks poised to continue. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.
DAX 30 Technical Forecast
Outlook: Neutral
The DAX 30 has enjoyed a formidable rally to start the month after surging more than 5% in a single week. Gains have seen the German equity index return to its January 2021 high near 14,130. Friday’s price action, however, revealed an inability to continue higher, likely due to resistance derived from the prior high. That said, the index trades narrowly beneath the level which is one of the few barriers standing in the way of further gains.
DAX 30 Price Chart: 4 - Hour Time Frame (October 2020 – February 2021)
With that in mind, a break above 14,130 might allow the DAX 30 to drive higher still as it looks to keep pace with the US indices. Still, European equities have shown time and time again that they lack the bullish conviction observed in their American counterparts, so a weekly close narrowly beneath resistance results in a neutral bias in the shorter-term headed into the week. Consequently, bullish strategies might be better explored in the Nasdaq 100, Dow Jones, S&P 500 or even Russell 2000.
--Written by Peter Hanks, Strategist for DailyFX.com
