In early trading this morning, the DAX Index has produced another solid leg upwards and its positive momentum is evident for all speculators to see. Short-term traders may be cautious within these higher levels that the DAX Index is successfully attaining, but the trend the German index has produced appears to have a groundswell of investors who remain bullish.
Global equity indices remain optimistic, and this tide of buying may not be over yet. US futures markets are indicating a positive opening also today and this has certainly added to the rather fast and upward conditions in the DAX Index. The 13400.000 has been tested early today and, although it did produce a reversal lower, what speculators should look for and contemplate is the ability of the DAX Index to sustain its current values and not suffer from a sudden profit-taking mode emerging.
Since the 9th of November, the DAX Index has proven it has the ability to sustain its value above the 13000.000 level and this is important. Yes, speculators always need to keep a practical outlook and be ready for reversals which go against them, but they also need to know when the time is right to join the speculative trend. Global equities have enjoyed positive momentum since the results of the US election and this is not a coincidence.
If the DAX Index can break the 13400.000 level higher and sustain values above this mark, investors may continue to pursue buying positions. The DAX Index is now within sight of early February values, and if it is able to find additional momentum, the next logical step upwards is a challenge of higher levels that were seen in mid-February when the German Index touched the 13600.000 mark and above. There are no guarantees, but speculators should pay attention to the optimistic sentiment investors are displaying.
Some traders may continue to suspect that the current values of the DAX Index may be too high and look for reversals, but they would be betting against a strong trend which may not subside near term. Yes, there will be small reversals lower, but if support continues to incrementally increase, speculators should consider buying the DAX Index on slight pullbacks.
DAX Index Short-Term Outlook:
- Current Resistance: 13420.000
- Current Support: 13325.000
- High Target: 13497.000
- Low Target: 13285.000
