The 13300.00 level may be giving speculators within the DAX Index a case of indigestion; several attempts have been made to sustain momentum above this mark in July, September and recently with limited success. However, as December approaches, traders may feel like the time is right to buy into the DAX Index and try to participate in what may be perceived as positive risk sentiment pervading the global marketplace.
While its major counterparts in the US have been able to broaden their horizons since the darkest days of COVID-19 economic fears, the DAX Index has continued to face headwinds when reaching its current levels and has been turned backwards with harsh reversals lower. Before the onslaught of pandemic implications tore apart equity indices globally, the DAX Index was in the midst of a serious bullish run as it challenged the 13800.00 level in mid-February, but this obviously changed.
As December approaches, the DAX Index has shown the ability the past few weeks to gain nicely and sustain its highs. The lack of a major selloff recently may signal that financial institutions may actually be accumulating the DAX Index and do not feel the need to cash out and take their profits quite yet. This may attract additional speculators who believe the 13400.00 to 13455.00 marks could prove to be vital inflection ratios up above. If these resistance levels are penetrated higher and risk appetite remains optimistic on global exchanges - particularly in the US - the DAX Index may finally be set to punch its way towards highs seen in the middle of January and muster a fight towards higher values.
The DAX Index has disappointed investors before who have wagered on it to surpass record highs. In October of 2017 and January 2018, the German index was challenging record highs only to fail. After reaching a high of 13450.00 in January of 2018, the DAX Index found itself trading near 11890.00 by the end of February, only a little more than one month later.
Speculators with scars from those tests of highs and recent highs in July and September of this year may feel a bit skeptical about the ability of the DAX Index to pursue historic values. However, what may separate the ability of the DAX Index to trade higher now compared to what happened before is the technical manifestation the past few weeks to show a sustained value range.
If the DAX Index can muster a fight within its existing range and not suffer a sudden setback, which demonstrates a reversal towards 12800.00 approximately near term, the German index may be able to feed off existing optimistic risk appetite in the global markets. The DAX Index is tantalizingly close to important resistance levels and has the capability to put in quick spikes upwards; in fact, the German index has a rather lengthy history of providing gaps. Speculators may believe now is the time to contemplate a wager on the DAX Index and its ability to muscle past resistance of 13400.00. If the German index can sustain values above the 13400.00 level, this could set off an additional speculative flurry for investors and speculators alike.
The DAX Index is not for the weak of heart; it has the ability to move fast and hard. Reversals lower unfortunately have been part of the trading landscape too. Risk management is needed, but speculative buying while using support levels below as stop losses could prove worthwhile this time around. December may prove to be a good holiday season for speculators in the DAX Index if they are prudent.
DAX Index Outlook for December:
- Speculative price range for DAX Index 12,738.00 to is 13,800.00.
- Support levels at 13100.00 may be fragile if broken lower and could set off a test of 13000.00 all the way down to 12738.00 if sentiment turns poor.
- Resistance at 13400.00 and 13d455.00 could prove important; if optimism is strong and the DAX Index is able to break through these levels upwards, it could challenge the 13616.00 mark and voyage higher.
