DAX Index: Equities Remain Cautious as Support Faces Tests

Robert Petrucci

The DAX Index essentially swam in place this week as the major equity indices continue to languish on cautious sentiment.

The DAX Index has traversed a fairly middling range the past few days of trading, and speculators with short-term perceptions need to remain focused on technical charts. Cautious sentiment seems to have slipped into the major equity indices globally for a moment, but speculators need to understand that these same indices remain within their higher altitudes and may not suffer violent selloffs.

Timing equity moves higher remains a challenging endeavor; speculators are often best off choosing direction based on trend and using risk management techniques which pursue direction, while protecting against violent moves not expected. The DAX Index remains within the higher values of its price band, even though support levels are certainly within sight of the fact that violent sell-offs have not occurred is a reason to suspect there is additional upside which will develop. The question is when and how to take advantage of the developing trend.

The DAX Index has also benefitted from a long-term bullish run, and again it needs to be noted that trying to predict the day the index will suddenly reverse path and bolt lower is difficult. Standing in front of a long-term trend remains a dangerous profession, while choosing to wait for momentum, which has been demonstrated on a regular basis, is practical. Speculators who choose to wait for an upside surge again may be making the best wager.

US future markets on Wall Street are indicating a negative start to the day. Investors are waiting on the US Federal Reserve’s FOMC Statement today which has perhaps put a couple of obstacles up regarding the pursuit of buying equities short term. However, the Fed’s statement is likely to remain dovish and there is little in the way of surprises, which should be expected. Perhaps the Fed will urge Congress to pass another stimulus bill, but as the next spending bill is being argued about its negative impact because it has not been passed yet has likely already been factored into the broad markets.

The DAX Index is hovering near the 13800.00 juncture. This value is roundly in the middle of the index’s trading range this week. Yes, recently the DAX Index did endure a strong sell-off, which tested the 13600.00 mark, but perhaps that was the worst of downside potential in the near term. Conservative traders should wait for pullbacks in the DAX Index and buy when support is tested. Reversals higher should continue to prevail until a strong bullish run is reasserted.

DAX Index Short-Term Outlook:

  • Current Resistance: 13855.000
  • Current Support: 13780.000
  • High Target: 13935.000
  • Low Target: 13720.000

DAX Index chart

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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