DAX Forecast November 27, 2015, Technical Analysis

The DAX broke out to the upside during the session on Thursday, as we have broken above the €11,200 level. With this, we believe that the market is ready to reach towards the €11,600 level, as the resistance seems to be fairly strong there. The DAX of course tends to leave the rest the European Union as it is one of the “safer” stock markets to invest in when it comes to the European Union, as Germany is the strongest economy.

We believe that the shrinking value the Euro should continue to serve the DAX well, as it brings up the demand for German exports. Ultimately, we think that the market will probably even break above the €11,600 level, but we could get a little bit of a pullback in that general vicinity. Pullbacks at this point in time should be short-term buying opportunities as the volatility should continue to be rather straightforward. It is a simple “buy on the dips” type of situation. Ultimately, the market is one that we believe will prove itself to be very reliable, as it typically has been in the past.

At this moment in time, we believe that the €11,000 level should be the floor at the moment, so having said that there is a significant amount of support below and it should keep the buyers interested over the longer term. Technically, this market has broken out from a “W pattern” below, and that is a very bullish reversal pattern in general.

As the European Central Bank looks ready to continue with the stimulus measures of that they have been involved in for some time now, it makes sense that money would flow into the stock markets in the European Union as bond market simply will not offer any type of significant return. On top of that, with the driving down of the value of the Euro, European stocks and indices in general should do fairly well going forward. Ultimately, the DAX is one of her favorite markets over the longer term anyway, so we remain very bullish.