Head and Shoulders on the DAX?

The head and shoulders pattern can sometimes appear upside down or inverted. On the daily chart of the German DAX, we can see that the index has formed what it appears to be an inverted head and shoulders pattern. The 9897 zone could be used as the neckline or confirmation line for the pattern, which it has broken to the upside today. The stock markets have been rallying since the European Central Bank raised its economic stimulus. That is why we see that the DAX has rallied for today. If the index continues going higher, then the 200 day exponential moving average, around the 10247 could act as resistance.

If the head and shoulders pattern fails and the index goes back below the 9897, then the DAX could fall towards the 9300 level. But the current pattern could be the beginning of a trend change to the upside on the long term. Let’s see if the index continues making higher highs and higher lows.