DAX Index Likely to Look for Breakout

The DAX index is going to reopen today after the holiday yesterday on account of May Day. The index continues to trade near the highs of the range and this has been the story so far over the last week or so. This is likely to give a lot of encouragement for the bulls who are likely to feel happy that they have been able to maintain the index at the highs despite the choppy trading in other areas.

DAX Likely to be Well Bid

It is quite likely that the bulls are eyeing a break and if and when that happens, the breakout is likely to be quick and strong as the index has been caught in the range for quite sometime and the traders would be itching for the right opportunity to buy the stocks. With the index likely to be buoyed by the expectation that the QE would last longer than what was initially thought, this could act as the boost for the index to break through the range.

It is indeed ironical that the index has to be moving up at a time when the incoming data from Germany and the Eurozone hasnt been as good as what it used to be at the beginning of the year. But this is what is needed for the markets as this would mean that the QE would be prolonged to support the economy as much as possible and as long as possible as well. This would mean that the printing presses would be in overdrive and would help the markets with a flush of funds.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone or Germany as the focus would slowly start shifting to the US and the dollar as the economic data from the US begins to roll in. The DAX index is likely to continue to trade in a strong manner and if and when a breakout happens, be ready for the ride.