DAX Index Daily Fundamental Forecast – March 15, 2017

The DAX continues to trade within a tight range between 11950 and 12050 as it has been doing ever since the beginning of the week. We do expect the DAX to ultimately reach its next target of 12350 but we have to agree that it is taking an especially long time in achieving that target. The DAX did start off well from its blocks towards the end of last year and it did seem for some time that the index will easily breeze through our targets of 12000 and 12350.

DAX Continues Consolidation

But then, something seemed to have happened. Maybe the bulls got tired or maybe  the investors became increasingly wary of Trump and his inward looking policies and they expected the German industries to suffer as a result but whatever the reason maybe, the bull run seems to have lost a lot of steam and we see the run floundering at this point finding it very difficult to make some quick headway. The fact that the index has managed to stay above 11900 for a few days now is the only encouraging thing for the bulls and probably the only thing that is keeping the index afloat.

We have been watching the data from Germany over the last couple of months when the bull run has stalled but we are unable to find any major drawbacks as far as the fundamentals are concerned. The German economy continues to throw up some strong numbers and the industries are also doing quite well and there does not seem to be much fundamentals behind the stalling of this bull run. We believe that is just a sense of collective fear that is holding back the bulls from push through towards the all time highs but we still believe that it is only a matter of when rather than a matter of “if”.

The whole market seems to waiting for the FOMC later in the day today and the DAX is no exception. So, we expect the DAX index to continue its consolidation as we head towards the announcement.