DAX Forecast October 24, 2014, Technical Analysis

The DAX as you can see broke higher during the course of the day on Thursday, clearing the €9000 level without too many issues. Because of this we end up in the previous consolidation area, which of course sends this market looking for levels as high as €10,000 over the longer term. We believe that the market should in fact continue to offer buying opportunities every time it dips, as the German index will certainly do better than most European indexes, as the Germans are considered to be more of a safe and secure bet.

On top of that, the European Central Bank is probably going to devalue the Euro given enough time, even though it’s been selling off on its own. With that, I cannot help but believe that there is a certain amount of value to be found in European indices at the moment. Because of that, I believe that short-term traders will continue to enter this market over and over again, as they will continue to look to Germany for guidance.

We do believe that there will be several resistance barriers above, combined at the end of the day the only significant one that could turn the market back around is at the €9500 level in our opinion. The €8900 level below should offer a bit of support, and as a result it’s likely that the area just below would be considered to be the “floor” as we have formed some type of base below, after bouncing off of the €8350 level.

We ultimately believe that the German market will be one of the strongest ones in Europe as it normally is, and certainly in a fairly nervous type of marketplace, Germany would be much easier to invest your money and that a place like Spain or Italy. Because of this, there will be several different reasons to buy the DAX going forward, but do not believe for one moment that we will make a straight shot higher, however, with resilience you should be able to profit quite nicely off of the move higher in this marketplace.