Dax Index Forecast: July 2020

Robert Petrucci

Traders of the DAX Index need to remain calm and control their emotions because the trend remains bullish.

June exploded with beautiful fireworks for traders who bought into the DAX Index the first few days of the month. However, if a speculator entered the market on the 8th of June until the 10th of June with a buying position, things likely did not go so well. Timing is everything when trading the equity indices particularly when timeframes are limited due to a high amount of leverage being used.

The trend for global equities remains bullish, yes, there are certainly periods which see volatile selling erupt, but if a trader has a longer timeframe and can withstand the slings and arrows of declines, buying and holding the DAX Index continues to make sense. Recent trading has shown mixed sentiment within the global stock markets, but when looked at with a longer approach an investor should practice patience and follow the trend upwards.

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Current support for the DAX Index appears to be the 12,200.0 juncture, but if this happens to falter and risk adverse trading increases the 12,000.0 mark could become a target below. However, it must be noted that current support levels technically are far above the support levels which the month of June started with, meaning gains have been made and going into July the trend remains strong for buyers.

Resistance near the 12,400.0 could prove vulnerable quickly if optimism grows within the global stock markets and indices vault higher. The DAX Index attained a high around the 12,900.0 level on the 8th of June, before reversing lower. However, since the middle of June the German index has done well again, after falling to a low of nearly 11,600.0 under volatile conditions, the DAX Index has risen and put in a relatively tame range. Admittedly, the index rose to a high of 12,600.0 about a week ago before faltering again.

Speculators may want to test resistance levels up above with selling positions, but they should be careful to make sure they are joining a trend instead of trying to create one alone. The DAX Index like all assets needs careful risk management, proper leverage and the ability to know how long the perceived trade will be undertaken – and in some cases endured when things go wrong. However, what may prove to be the best strategy for traders of the DAX Index is to watch technical support levels and see if they look like they are holding, while also taking into consideration trading results on other major global indices like the S&P 500 from the United States.

Wagering against the upwards trend of the Dax Index could prove expensive. A three month chart demonstrates the German index maintains solid value and is not far below highs it touched around the 8th of June. Traders who have the ability to position themselves and handle the emotional strain of carrying positions overnight and for a stretch of a few days or even a week or so, may find themselves part of a positive trend for the DAX Index. Global stock markets are certainly facing a high amount of scrutiny from investors who question outlooks for corporate balance sheets, but because of a high degree of central bank interventions in the equity markets and within other assets, being part of the crowd taking advantage of a positive mid-term trend may prove worthwhile.

DAX Index Outlook for July:

Speculative value range for DAX Index is 11,800.00 to 13,000.00

Support levels at 12,000.00 and 11,800.00 appear to be rather solid

Resistance at 12,500.00 and 12,700.00 could prove interesting as targets

Dax Monthly

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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