The DAX Index has opened with a strong gap higher and achieved more record values in early trading today.
The DAX Index is trading comfortably above the 15000.00 juncture and, in early trading today, touched the 15313.00 mark temporarily. As investment houses return from their long holiday weekend, traders should expect volumes to grow and for another dose of volatility to ensue. Early calls from the US future markets indicate a slight sell-off ahead for the major equity indices, but this comes on the heels of another record-breaking performance yesterday higher.
Speculators cannot be blamed for wanting to catch their collective breath at these heights for the DAX Index and its major global counterparts. However, trading conditions are likely to remain fast and produce rather eye-opening results as financial institutions continue to react to the incredible amounts of money being discussed regarding US stimulus and its potential impact on the economy of the US and globally.
The ability of the DAX Index to achieve new highs this morning displays the amount of buying exuberance, which exists with the broad markets. Technically, selecting a resistance level via today’s short-term perceptions can be done by looking at the early highs reached this morning. The 15300.00 is certainly a target for traders, but after breaching this level, the DAX Index has seen a reversal lower and the 15250.00 mark is now being fought over.
Certainly, speculators need to be on the lookout for profit-taking to potentially manifest at these record levels. However, it remains a difficult task for traders to time equity markets exactly right when speculating. The overwhelming sentiment within the broad marketplace, particularly among the major indices, currently is optimistic. There are skeptics to be heard, but wagering against the bullish trend may be like spitting into the wind and costly.
Cautious traders who believe the DAX Index has gained too much but want to pursue its upside momentum are encouraged to wait for slight pullbacks which come within sight of short-term support. US markets may prove to be cautious early on, but speculators should understand that the full return of investment houses after the long holiday weekend could spur on additional buying momentum short term on global indices, including the DAX Index.
DAX Index Short-Term Outlook:
Current Resistance: 15315.000
Current Support: 15222.000
High Target: 15395.000
Low Target: 15130.000