DAX Index Fundamental Analysis – week of February 5, 2018

The DAX index crashed during the course of last week as panic seems to have gripped the stock markets around the world and the DAX was no exception to that. The index moved lower through the 13000 region and ended the week below the 12700 region and unless the bulls come back and make a stand, we are likely to move much lower.

DAX Crashes Lower

The DAX had been under pressure since the beginning of the week as concerns began to grow globally over the continuous rise in the indices that we have been seeing the world over, during the past couple of months. We have been seeing an increasing number of bankers and leaders expressing concern over the way that the stock markets were moving higher and this brought in uncertainty among the traders and the investors who kept the index under pressure for much of the week.

Towards the end of the week, we saw that the yields began to rise to new highs in the major markets around the world and this led to large funds pulling their investments from the stock markets and pushing them into yields in the hope of better and safer returns. This led to a large sell off as we entered towards the final phase of the week and this pushed the index through the 12700 region to close the week.

Looking ahead to the coming week, we do not have any major news from the Eurozone, but we expect the stock markets to continue to be under pressure during this period as the yields continue to rise and traders begin to panic. Any bounce in the DAX should be viewed as an opportunity to sell as we believe that the bearish trend is well and truly entrenched. The fact that the index has not been able to progress beyond the 13500 region over the last few weeks clearly shows that the bulls have given up control to the bears. If the fall continues, then we should see the support coming in at the 12300 region.