DAX bounced off its potential megaphone (gray) bottom today to retest its head and shoulders neckline (purple).
A breakout through the megaphone bottom means the H&S breakout was good. A breakout upwards through the head and shoulders neckline means a retrace to at least the megaphone VWAP at roughly 9400. If it breaks out upwards through that level, it’s going for the megaphone top.
I wouldn’t be surprised to see the price continue to consolidate between the megaphone bottom and H&S neckline, forming a small megaphone. In that case, you bet the breakout from that.
The green scenario on the chart would put a more complex head and shoulders top on DAX.
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