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Dow Jones, Nasdaq 100, DAX 30 Forecasts: Bullish

  • The Dow Jones is tilted to the topside after breaking above trendline resistance
  • The Nasdaq 100 will take aim at a rising trendline from March that might allow for the next leg higher
  • The DAX 30 enjoys a similarly encouraging technical backdrop that could open the door to greater gains
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Dow Jones Technical Forecast

Outlook: Bullish

The Dow Jones tagged a new record last week after the Industrial Average broke above resistance and rocketed above 34,000 for the first time in history. With weeks of gains behind it, the Dow has dispatched nearly every topside barrier in its way – apart from round psychological numbers like 35,000 – and will look to continue higher as a result. In addition to a relatively clear path higher, recent progress to the topside may see prior resistance serve as support going forward.

Dow Jones Price Chart: Daily Time Frame (January 2020 – April 2021)

To that end, the Dow Jones will look to continue its march higher with potential resistance at the 35,000 mark to consider. In the event of risk aversion, the Dow can seek support from prior resistance along the ascending trendline from the June high which rests slightly above a Fibonacci extension around 32,660. Should both levels fail to stave off declines, subsequent support might be found from the 50-day simple moving average and ascending trendline from March 2020.

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Nasdaq 100Technical Forecast

Outlook: Bullish

The Nasdaq 100 has charged higher in the month of April as it looks to make up for lost time. Typically the market-leader among the three major US indices, the Nasdaq 100 took a backseat to the Dow Jones and S&P 500 during the first quarter as Treasury yields pressured mega cap technology stocks. Now that the tide has turned, the Nasdaq can take aim at an ascending trendline that had helped guide it higher for months.

The Trend is Your Friend: Forex Trendlines

The line in question is derived from the index’s March low and had been crucial in keeping the Nasdaq afloat during bouts of risk aversion until selling pressure finally saw the level broken in late February. Now narrowly above the current trading price, prior support will look to resist a move higher in the week ahead, but with a new all-time high tagged Friday, bulls maintain momentum.

Nasdaq 100 Price Chart: 4 – Hour Time Frame (January 2021 – April 2021)

Should resistance spark a reversal lower, initial support might reside around the prior all-time high near 13,900. Secondary resistance likely rests slightly beneath 13,400, an area that previously served as resistance until early April. In the meantime, follow @PeterHanksFXon Twitter for updates and analysis.

DAX 30 Technical Forecast

Outlook: Bullish

The DAX 30 has tried to keep pace with the American indices as it drives deeper into its own record territory. Moving beyond a Fibonacci extension around 15,420, the German equity index has few barriers overhead which may allow bulls to continue the rally. Should risk appetite wane, prior resistance should serve as support meaning buoyancy might be found around the 15,420 and 14,780 levels in the week ahead.

DAX 30 Price Chart: Daily Time Frame (January 2020 – April 2021)

Despite months of gains alongside the Dow Jones, Nasdaq 100 and S&P 500, I would argue the DAX 30 – and other European indices – have done so more conservatively. While this may lead to underperformance in times of rampant speculation, the DAX 30 may be rewarded if risk aversion picks up in earnest as the US indices have a lot more to lose in comparison. Regardless, the German equity index looks poised to continue its recent rally at a slightly slower pace than that of the American indices.

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–Written by Peter Hanks,Strategist for DailyFX.com