As we had mentioned yesterday, the breakout that was finally seen in the DAX on the day before did not have the momentum that we would have normally
As we had mentioned yesterday, the breakout that was finally seen in the DAX on the day before did not have the momentum that we would have normally expected to see, especially when it is a breakout that comes after more than a month of consolidation. In such a situation, we would have expected the breakout to be fast and strong and something that blows through all the sell orders and the bears. But that is not something that we saw.
The breakout that we had seen was more a slow and steady dismantling of all the sell orders in the vicinity of the current prices and a move of this kind only shows that the bulls are still not confident on whether they are making the right move. It is more like a soldier walking through deftly over a minefield in the fear that he might trip over a mine very soon. This is the reason why we are still not confident of this move though it has helped us to achieve our short term target of 12000.
We have to keep watching the fundamentals and the geopolitical happenings around the world to gauge and see the direction that this move is likely to take. The US stock markets have been on a gigantic bull run over the last couple of months but the DAX has failed to join in so far. This will always be at the back of the minds of the buyers in this index as they fear that the global stock markets could reverse anytime and they do not want to be the ones who are going to be holding the bad at the end, when such a thing happens.
Looking ahead to today, we do not have any major news from Germany for the rest of the day and so expect some more consolidation and ranging around the 12000 mark.
Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.