The DAX Index opened with a spike upwards this morning. The German index is trading near important highs as it challenges loftier values last since in the mid-September. Risk takers may feel the need to join the speculative fray today as global indices appear ready to muster another leg upwards. We have seen these values before and reversals lower ensue. Speculators need to be prepared for sudden developments downward which can certainly strike.
However, there does appear to be a rather optimistic approach in the equity markets, which is being led by bullish momentum on US indices which are approaching very important landmark highs. Sentiment appears to be positive in the short term as financial houses contemplate the notion that news regarding potential coronavirus vaccines have significantly emerged. The belief the current White House administration may be finally ready to allow a normal transition of power to take place may also be bolstering confidence.
The DAX Index has struggled within these heights before and it is not unreasonable to believe that this time may produce another reversal lower. In early September of this year, the 13400.00 juncture was tested but failed to sustain its value. Many tests of the 13300.00 target have also produced unimpressive results. However, speculators may believe that the DAX Index may have the ability to finally puncture the resistance levels it is now battling after making another push higher.
Solid risk appetite could certainly fuel further buying in the German index. Speculators also need to remember that trading in the US will begin to diminish the next day-and-a-half as traders begin to disappear for the long Thanksgiving holiday. This may create a window of opportunity sooner rather than later for bullish speculators, based on the belief that American investors may seek to participate as buyers in equity indices that they believe will go up today and tomorrow, before they vanish for the long weekend to come.
Buying the DAX Index at these levels may feel like it is a speculative endeavor and one which has been punished in the recent past, but after attempting to puncture current resistance levels and failing to do so the past few months, now may be the time to wager that this time is different. Speculative forces may find extra momentum via the prevailing optimistic sentiment on global markets, and this could certainly have an effect on the DAX Index and create more positive momentum short term.
DAX Index Short-Term Outlook:
- Current Resistance: 13270.000
- Current Support: 13211.000
- High Target: 13313.000
- Low Target: 13197.000
