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DAX Fundamental Forecast – September 26, 2016

By:
Colin First

The DAX had a generally bearish day on Friday as it had closed near a range top on Thursday which it found difficult to crack. We had mentioned in our

Dax

The DAX had a generally bearish day on Friday as it had closed near a range top on Thursday which it found difficult to crack. We had mentioned in our forecast for Thursday that the resistance at 10680 would be a tough nut to crack. This proved right as the index tried to break through that resistance a couple of times on Friday but couldnt manage to get through. The bulls seemed exhausted after these attempts and they seem to have given up in trying to break through and we saw the index have a small correction towards the support at 10600.

DAX Hourly
DAX Hourly
The index sits at 10614 as of this writing and unless we see a break of 10680 quickly, we could be in for a 300-400 point correction in the index over the next few days. The German Ifo Business Climate is scheduled to be released today and this could be a market mover as far as the DAX is concerned. We have a bearish outlook to the DAX for this week and we though we might see a slightly bullish open for the index today, we believe it will slowly give way to a bearish session and we could see the DAX ending lower today.
Stock markets around the world are very closed to their highs and thats why we had mentioned last week that it is better for traders to trade safe. It is better to stick to the edges and trade with tight stop losses. We have been of the view that the stock markets are in for a bearish phase but like any other trade, its always difficult to get the timing of the trade correct. The same problem exists for this phase as well and thats why we have been insisting for traders to be careful in trading and investing at these highs. These phases will have minor bullish runs which tend to draw in unsuspecting retail traders into buying at these highs and they will be left holding the stocks when the bearish phase begins. Trade safe is the mantra.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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