Traders of the DAX Index today need to mind the gap and beware of fast trends that remain dangerous in the German Index.
After taking a hit late last week and testing support levels not experienced since the 11th of August, the DAX Index has opened today’s trading with a resounding surge upwards. Early buying this morning was instantaneous which means programed buying was ready to take advantage of the selloff which occurred before going into the weekend.
Risk sentiment is a delicate flower and it can be ruined in a moment’s notice, but this morning’s buying on the DAX Index mirrors the optimism being seen on other global indices. Future markets in the US are also indicating a positive opening for the major exchanges on Wall Street as they continue to swim near important highs. The volatility on the DAX Index the past five days is a direct reflection of the doubt, which continues to linger among investors but continues to rebound and track higher when selling proves unsustainable.
Support levels are dangerous within the DAX Index short term because of the gap which opened trading this morning, but speculators who aspire to be buyers in the marketplace may want to consider stop-loss limit orders near the 12900.00 level. The use of leverage will be essential when trading the DAX Index because of the spikes the asset has displayed the past few trading sessions. Support near the 12630.00 juncture was touched on Friday before starting to see a slight reversal higher. In other words, be careful with the amount of money you speculate.
The current price action for the DAX Index is within the 13020.00 to 13040.00 vicinity. Yes, these high valuations have been seen before, in fact, they were tested last week before they proved faulty and support was tested abruptly with quick selling. However, traders need to remain calm and take into consideration the constant push upwards which has been seen on major equity indices. The DAX Index does not trade in a vacuum.
Until risk sentiment falters significantly, traders logically may want to look for higher values on the DAX Index. It will be important to cash in winning positions when they are attained. Greed and the pursuit of higher targets that remain above should be cautiously considered and managed by speculators. The DAX Index has proven it does not offer a one-way road upwards, but if it is traded carefully speculators can profit with positions that look to take advantage of its bullish momentum.
DAX Index Short Term Outlook:
Current Resistance: 13050.000
Current Support: 12897.000
High Target: 13100.000
Low Target: 12800.000