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DAX Index Likely to See Some Profit Taking

By:
Colin First
Published: May 7, 2018, 08:55 UTC

The index has been moving higher following a breakout

DAX Monday

The DAX index is likely to continue from where it left off last week as it has finally managed to break through the clutches of the range that it has been in over the last few weeks. The range had made it a tiresome exercise for the traders to try and make sense of it and trade within the range.

DAX Buoyant For Now

It also proved difficult for many of the traders, especially the long term ones, to continue to trade within the range and they would be able to have a sense of relief over the next few days as they manage to trade the breakout. But the traders need to be careful about this as it is likely that the breakout could lead to a slow and steady correction over the next few days, back to the region of the break and that is the place that the traders should be looking to go long rather than trying to trade at the highs at this point of time.

DAX Hourly
DAX Hourly

The region of 13000 is nearby as far as the index is concerned and we are likely to see the bulls trying to take some profit and also trying to get lower prices so that they can buy again. The index has been buoyed by the general improvement in the risk sentiment all around the world and also in the Eurozone especially after the recent data and the press conference from the ECB pointing to the continuation of the QE at current levels over the short term.

Looking ahead to the rest of the day, we should expect a buoyant day of trading with the trading turning out to be choppy later in the day as the US session picks up. We do not have much by way of data but we could see some correction later in the week as traders begin to take profits.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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