DAX Index Looking to Break Through 13000

The DAX index made a pretty strong move during the course of the day yesterday but as we had mentioned in our forecast last week, the index weakened as it approached the 13000 region and the day ended on a weaker note. There are no signs of any reversal as yet but there could be some correction.

DAX Corrects Lower

The region around 13000 is a round figure and hence it is likely to attract a lot of profit taking from the various traders and investors. This is something that we had highlighted in our forecast. The index continues to look pretty strong and steady at this point of time as we dont see any signs of weakness as yet. The risk sentiment around the world continues to be strong as well and this has been supportive of the major stock markets.

As we have been saying repeatedly, we believe that the European indices have been boosted by the prospect of the QE continuing for a longer period of time and this has helped the buy side of the markets and this is the reason why we are seeing a larger demand. Also, the breakout from the large range has given a lot of confidence to the traders that the bullish move is likely to continue and this is helping the bullish cause as well. It remains to be seen how and when the break through the 13000 region would happen as far as the DAX is concerned though such a move would require a lot of momentum and strength from the bulls.

Today we have the German Production data but that is unlikely to have much of an impact on the index which is likely to be driven more by the global and macro economic factors in the short and medium term.