DAX Index Fundamental Analysis – week of November 27, 2017

The DAX index ended the week stronger than from where it began which turned out to be quite a surprise for the traders and analysts alike. This is due to the fact that the political turmoil in Germany was expected to have a huge impact on the index and lead to a sell off but the index chose to largely ignore what was happening in the political circles and turned out to be bullish for most of the week.

DAX Shows Strength Despite Turmoil

The week opened with the reports of the coalition talks breaking down in Germany and Merkel being left in the lurch as far as forming the next government was concerned. This led to doubts and uncertainty on what she would do to cobble together a coalition and the stability of the same even if happened. The threat of new elections and the corresponding uncertainties also hung on top of the market and this led to a very weak opening of the DAX on Monday. But as the week wore on, the traders seemed to ignore what was going on there and began to push the index higher.

Many traders seemed to view this as a opportunity to load on to their longs and as the week wore on, we saw more and more investors and traders jump into the index and push the index through the 13000 region and despite some bumps along the way, the index closed the week above the 13000 region and it looks as though the index is set to continue its bullish run in the short and medium term.

Looking ahead to the coming week, as we draw to a close for this month, we are likely to see the focus to continue to be on the political developments in Germany and the market would hope to see Merkel cling on by some means as it would assure them of stability in the months to come. The incoming data from Germany continues to be strong as usual and the traders would hope the same trend continues when we get the retail sales and the CPI data from Germany in the coming week. If the political turmoil shows signs of getting sorted out and the data comes out strong, we could see a strong bull run in the DAX in the coming week.