DAX Index Daily Fundamental Forecast – January 3, 2018

The index moved lower during the first half of the trading yesterday as the index broke through the 12800 region and and moved lower and it appeared as though the bears would take further control of the index and moved it into bearish territory. But the index managed to recover later in the day abd broke back above 12800 and continued higher to end the day on a strong note and give hope for the bulls.

DAX On Path to Recovery

The index is under pressure due to the political developments in Germany where Merkel continues to struggle to form a government. The bears used the lull in trading during the second half of last month and managed to break the range and push the DAX lower towards the end of last month. But as always, we are doubtful of any break in the range that happens during low volume and that is why we had advised caution to the traders and had requested them to wait and watch for a few more days to see whether the bears are able to make the move stick or whether the bulls would be able to move the index back into range.

The fight is still raging between the bulls and the bears as of this writing and no one seems to have gained full control as yet. The bulls would do well to push the index back into range and if and when that happens, we should be in for some more consolidation over the next couple of weeks. We should wait on the developments in the political space as well as Merkel picks up the pieces from the end of last year and begins her efforts to form a coalition once again and it remains to be seen how long she would need to manage to do that.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone or Germany for the day but we can be ready to watch an interesting battle between the bulls and the bears as they fight to take control of the index and we have to wait and see whether the return of the traders from the holidays would help to boost the bulls.