Last week, Germany's key Dax stock index closed below 11,200 points, the neckline of an irregular rounded top. This follows two bearish engulfing candles, which warned of an imminent correction. So far, this has mapped out as an A, B, C-type move where C is holding at the Fibonacci 38 per cent retracement support level. If C were to be the same height as A, the projected target would be 10,700 points, or 9,940 points (61 per cent retracement) if it were 161 per cent of A's height. The measured target from the topping pattern lies at 10,000 points. Therefore, while consolidation might occur at 10,700 and 10,400 points, our preferred target is 10 per cent below current levels at 10,000.
