DAX 40 Forecast: 26,350 Breakout Could Target 26,960

European markets remain volatile. Initial optimism about a possible resolution of the Persian Gulf conflict following the Democratic victory in the US midterm elections gave way to disappointment over corporate results and stronger demand for defensive assets. Among the reports released on November 5, Deutsche Telekom AG’s results provided a positive earnings surprise: revenue reached €31.10 billion against forecasts of €30.45 billion, while adjusted earnings per share (EPS) came in at €0.630 versus €0.600 expected. Commerzbank AG reported revenue of €3.20 billion against forecasts of €3.32 billion and EPS of €0.755 versus €0.790. Rheinmetall AG also missed estimates, reporting revenue of €3.15 billion against €3.23 billion expected and EPS of €5.98 versus €7.03, while lowering its full-year guidance.

The bond-market snapshot also showed lower German government bond yields amid earnings-related volatility and demand for safer assets. The 10-year yield stood at 3.246%, compared with 3.307% in the preceding reference period; the 20-year yield declined to 3.610% from 3.661%, while the 30-year yield fell to 3.636% from 3.681%. The European Central Bank kept its key interest rates unchanged at its October 29 meeting.

Gainers in the quoted equity-market snapshot included Zalando SE (+3.75%), Bayer AG (+3.65%), Fresenius Medical Care AG (+3.42%), BASF SE (+3.30%) and Deutsche Börse AG (+2.76%).

Decliners included Rheinmetall AG (–16.14%), Infineon Technologies AG (–8.54%), Siemens Energy AG (–4.70%), Commerzbank AG (–2.81%) and Deutsche Telekom AG (–2.09%).

Support and Resistance Levels

On the daily chart, the index is recovering above the upper boundary of the local descending channel spanning 25550.0–24500.0, which began forming in late summer. The earlier channel setup was discussed in our previous DAX 40 forecast.

Technical indicators maintain a buy signal: the Alligator indicator’s faster exponential moving averages (EMAs) are above the slower ones, while the Awesome Oscillator (AO) histogram is forming corrective bars in positive territory.

Support levels: 25860.0, 25140.0.

Resistance levels: 26350.0, 26960.0.

DAX 40 Trading Scenarios and Index Forecast

Long positions may be considered after the price rises and consolidates above 26350.0, targeting 26960.0 with a stop-loss at 26000.0. The estimated holding period is seven days or more.

Short positions may be considered after the price declines and consolidates below 25860.0, targeting 25140.0 with a stop-loss at 26200.0.