DAX Fundmental Forecast – January 16, 2017

The DAX finally had some much needed correction last Thursday as it filled the gap from the beginning of the year following a press conference from Trump in which he failed to spell out anything substantial in terms of fiscal and economic policy. This disappointed the markets around the world and the same effect was felt on the DAX as well and hence the correction. This kind of correction was needed to keep the bull run strong and also for the bulls to load their longs once again and we hope that the traders made use of this opportunity.

As was expected, the correction on Thursday to fill the gap was quickly met with some strong buying which helped the index back through 11500 and through 11600 as well and it trades above this figure as of the close on Friday. We believe that the index will continue to remain strong and we should ultimately see 12000 in the short term as all corrections, which are already few and far between, have been met with quick and strong bounces which show that the uptrend continues to be vibrant and strong. The German economy has managed to survive all the turmoil going on around it in the eurozone and has been able to throw up strong data especially in the manufacturing sector which shows the resilience of the economy. This has helped to keep the economy strong which is ultimately reflected in the stock markets and the DAX.

Looking ahead to today, we did have some bad press surrounding the Brexit process over the weekend which could affect the DAX in the short term but we do not expect any major correction, if at all, and any correction in the index should be viewed as an opportunity to go long. Trade safe and make sure that you have your stop losses.