DAX Index: Selling Pressure Still Mounting

Robert Petrucci

Selling pressure continues to build on the DAX Index as investors have demonstrated nervousness and short term concerns mount.

The DAX Index has had a difficult month of trading in October. The German index as of this morning is under selling pressure and is touching values it began the month near.  This means the gains the DAX Index accumulated and its values approximately of 13155.00 on the 12th of October have evaporated. The DAX Index is now challenging the 12570.00 value and this level appears vulnerable as nervousness is being displayed on equity indices throughout Europe.

US future market calls have turned negative too and losses may be seen on the American exchanges upon opening. However, US equities are still near record-high levels and not far away from high watermarks. The same cannot be said for the DAX Index which did see plenty of bullish momentum this summer with highs in late August but has seen a conservative stance take hold. Yes, after coming off highs in August and struggling until late September, the DAX Index did put in a positive run and produce optimistic values but trading sentiment seemingly has not been able to get over hurdles and provide stable momentum consistently.

If the DAX Index continues to experience selling pressure and burst through support near the 12550.00 level, German equities may grow even more nervous.   A low near 12335.00 was tested on the 25th of September and that low also was seen in early August. The DAX Index touched the 12300.00 levels in late July when equity market sentiment struggled. However, after hitting those levels a substantial summer rally did take place. However, this time around – at least for the short term – it appears unlikely a rally is about to suddenly emerge.

Global risk appetite appears to be growing fragile short term and this is taking place as a combination of shadows has begun to engulf the trading landscape.  Concerns about a second wave of coronavirus are having an effect to sentiment in Europe, but this might not be the biggest catalyst for the downward move in the equity markets. Political worries regarding the outcome of the US election and the ongoing Brexit negotiations are having their influence too. Yes, these concerns may have answers within the next couple of weeks, but they are making investors nervous now.

Selling the DAX Index may be the best speculative wager near term.  Reversals higher may certainly develop, but they are unlikely to be too optimistic in the coming days. Support levels have proven vulnerable and for traders using CFDs to speculate on the DAX Index, pursuing downside action and believing nervous sentiment will continue to produce negative momentum may be the path to follow.

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DAX Index Short Term Outlook:

Current Resistance: 12735.000

Current Support: 12550.000

High Target: 12850.000

Low Target: 12475.000

DAX

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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