DAX Index Fundamental Analysis – week of April 17, 2017

It was generally a difficult week for the major stock markets all over the world and the DAX was no exception. We had a slight slip in the Trump trade as there were doubts being raised about his real intentions and capabilities and investors are now doubtful on whether they would be able to get some good returns on their investments in the stock markets if it is made at such all time highs.

DAX Weakens on Global Cues

There is a lot of risk and uncertainty around the world already and Trump and his team are not making matters any easier. They have been threatening North Korea, bombing Syria and Afghanistan and escalating the conflict in those regions and this has raised the risks around the world which has led to a draining of the funds from the stock markets and these funds are getting pushed into gold and other safer assets. We had mentioned that with the DAX having achieved its all time highs, it is good to take profit and wait for some good correction in the index or wait for the break of the highs before buying again and that has proved right so far.

The index has been struggling to make an impact on the 12350 region in recent times and has since slowly and steadily dropped off to the 12000 region over the last week as the stock markets corrected around the world. We have to wait and see what happens at the region around the 12000 mark and if we see some good buying over there, it might be time to buy again for another shot at 12350 but so far, there have been no signs of having reached the bottom of this move as yet.

Looking ahead to the coming week, it is the second half of the month and so the news and events generally dry up and we dont have any major news from Germany for the coming week. Monday would be a holiday on account of Easter and for the rest of the week, we can expect some consolidation with a bearish bias, as the DAX index looks for some guidance and direction from the fundamentals.