The DAX Index was able to make new record highs in the middle of April, but quickly saw its apex values erode as a reversal lower flourished for a couple of days. However, speculators need to remember that the norm within the world of trading is that record highs often produce a bit of profit-taking, and the DAX Index, like all other major equity indices, is not immune to these type of moves. As the month of May gets ready to start, the DAX Index is near an uncomfortable inflection point, because if bearish momentum proves strong in the short term, a test of the 15000.00 juncture below could develop.
While lows may be considered a fragile area for speculators to become buyers when considering trends, traders also need to keep in mind the long-term bullish rally the DAX Index and other major indices have provided. Traders need to ask if now is the time to contemplate the end of the bull market in equities. The answer most speculators may conclude with is a resounding no. The fact that markets continue to produce record highs remains attractive, and reversals lower towards support levels - until proven otherwise - can be used as rather solid areas to activate buying positions.
The 15500.00 proved to be an important psychological roadblock, but this might be a temporary stop on the way to higher values. Technically, many major equity indices are traversing rather breathtaking values, but even after a selloff from record highs, the DAX Index will begin the month of May still within the higher values of its mid-term and long-term price ranges.
This may not be the time to start testing the DAX Index with selling positions. Instead, cautious speculators may want to continue to look for upside momentum via support levels which remain useful. Technical resistance levels are within sight for traders of the DAX Index, which may prove attractive short term if buying positions are pursued. There are no guarantees of record highs being produced in the coming month, but wagering against the bullish trend could prove to be a rather costly speculative adventure within the DAX Index.
DAX Index Outlook for May:
Speculative price range for DAX Index 14689.00 to is 15950.00.
The first line of important support to watch is the 15070.00 level. The next important mark will certainly be the 15000.00 juncture and, if bearish pressure sustains values below this ratio, speculative bears could target the 14885.00, which was traversed in the end of March. If negative sentiment continues to build momentum, the 14690.00 price could be tested.
Having achieved a high of 15500.00 on the 16th of April, a strong reversal tested the 15100.00 a few days later. However, after several incremental moves higher from lows near 15085.00 on the 21st of April, the DAX Index is near the 15135.00 level as May begins.
If buying sentiment continues to be exhibited, a close resistance level to consider is the 15200.00 mark. Sustained buying beyond this value could cause a rush towards 15250.00, which should be looked for; and importantly, if bullish momentum continues to be fueled, the next target of significance is the 15335.00 juncture.
If the 15335.00 level is tested, which was last experienced on the 28th of April, it could mean that bullish sentiment is strong and another test of highs is about to ensue. The 15500.00 mark may prove to be a key inflection point, and if an upward trend remains strong, all-time highs could fall swiftly and the 15600.00 to 15700.00 could prove enticing. If the DAX Index remains positive, it would not be a surprise to see a push for the 16000.00 level.
