DAX Index Daily Fundamental Forecast – October 5, 2017

The DAX index broke through all time highs yesterday but then corrected later in the day and ended the day primed to break through the psychological barrier of 13000. We had mentioned in our forecast yesterday that it was only a matter of time before the index breaks through the all time highs and also through the 13000 region and thats what we are seeing right now. After being in a slumber for the past few weeks, the DAX bulls seems to be hitting back with a vengeance over the last few days as they have been carrying the index higher and higher.

DAX Pushing to Highs

The signs of an eventual breakout were there a couple of weeks before, in the week leading up to the German elections and after a brief lull following the elections, we have been seeing the index breaking out and moving higher. The fact that the bulls could not hold the break through the all time highs would be a minor setback to them but they are likely to brush it aside it the short term and continue their buying of the index.

We have been mentioning this a few times already but we believe that the stock markets around the world are in for a long term bull cycle. The central banks of the major economies are looking to hike rates further in due course of time and we are likely to see this helping the flow of funds into the stock markets in the medium and long term and once this begins, we should see the stock markets continuing much higher.

The DAX is unlikely to left behind in this bull run and so we believe that any correction in the index towards regions of support should be viewed as an opportunity to go long on the index. Looking ahead to the rest of the day, we do not have any major news from Germany and so expect the bull effect from yesterday to continue today as well.