Chart alert: DAX’s dead cat bounce may have ended, watch 24,000 downside trigger

• European equities have weakened sharply, with the Euro STOXX 50 falling 6% over two days before a modest rebound, while the DAX remains down 4.3% since 27 February amid heightened geopolitical tensions.
• Ongoing conflict involving Iran and military actions authorised in the United States Senate risk prolonging Middle East energy disruptions, potentially raising energy costs for the European Union and weighing on regional equities.
• Technically, the DAX appears to be forming a bearish flag below 24,350, suggesting Wednesday’s rebound may be a “dead cat bounce”; a break below 24,000 could trigger further downside toward the 23,750–23,290 support zone.

European stock markets have underperformed against their US peers at the start of this week, from Monday, 2 March 2026, to Tuesday, 3 March 2026, where the Euro STOXX 50 plummeted by 6%, recording its worst 2-day decline since early April 2025, when US President Trump unveiled his global US reciprocal tariffs.

On Wednesday, 4 March, the European equities managed to stage a comeback due to “bargain hunting”. The German DAX managed to end Wednesday’s session with a gain of 1.7%, with a similar magnitude seen in the Euro STOXX 50.

Overall, the European stock markets are still trading in the red since last Friday, 27 February till Wednesday, 4 March, where the German DAX recorded an accumulated loss of 4.3%, and fared better than several key Asia Pacific and Emerging Asia stock markets; South Korea’s KOSPI (-18.45), Japan’s Nikkei 225 (-7.8%), Taiwan’s TWI (-7.3%), and Hong Kong’s Hang Seng Index (-5.2%) (see Fig. 1).

The European Union economy is dependent on the Middle Eastern liquefied natural gas, which accounted for approximately 3.5% to 3.8% of the EU's total gas supply in 2025.

The US-Iran war is still showing no signs of de-escalation, and the US Senate has cleared the way for President Donald Trump to continue military attacks on Iran in a vote.

Press briefings from the White House so far have offered little clarity on a potential endgame to the conflict, leaving the risk of prolonged oil and gas supply disruptions in the Middle East elevated. Such uncertainty could amplify energy price pressures and inflict near-term economic strain on the European Union, in turn detrimental to European stock markets.

Let’s now decipher the short-term (1 to 3 days) trajectory of the German DAX from a technical analysis perspective.

Watch the 24,350 key short-term pivotal resistance (also the 38.2% Fibonacci retracement of the steep decline from 27 February 2026 high to 3 March 2026 low), and a break below 24,000 (lower boundary of the “bearish flag” exposes the next intermediate supports at 23,750, 23,480, and 23,290 (a Fibonacci extension level) (see Fig. 2).

However, a clearance and an hourly close above 24,350 invalidates the bearish scenario for a further squeeze up towards the next intermediate resistances at 24,715 and 25,020.

• The 3.2% rally (low to high) seen on the Germany 30 CFD index (a proxy of the DAX futures) from the 3 March 2026 low of 23,592 has formed a potential minor “bearish flag” configuration, which suggests a “dead cat bounce” within a downtrend phase.
• The recent rally has stalled at the 200-day moving average.