- At this point, the DAX is beginning to look a bit unstable, as we gapped lower at Thursday’s open, dropping well below the 50-day EMA.
- As I do this analysis, we are sitting just above the crucial €23,000 level, and it is entirely possible that this downdraft continues.
- After all, there is a gap near the €22,500 level that people may be watching and aiming for, and it is an area that could cause a little bit of a reaction.
- Nonetheless, what I’m also watching is the fact that risk appetite seems to be evaporating a little bit at this point.
Trend Struggling
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The uptrend in the DAX is obvious, and I think the trend at this moment in time is struggling a bit. However, I think that it is a bit of a stretch to suggest that the trend is completely over and the sellers are going to start shorting drastically. All things being equal, I do think this is a market that if you are patient, you may get an opportunity to pick a bit of “value” in Germany. After all, Germany is one of the first places that people go looking to invest in when they are thinking of Europe. As the DAX goes, so goes the rest of the European Union, so this is one of the most important charts to watch.
Germany looks as if it could be heading back into recession from some indicators that I follow, and of course with all of the external pressures coming out of the Middle East and global trade wars, I think it’s difficult for stocks to truly take off to the upside after the monster run that we have seen. That doesn’t mean that everything is all gloom and doom, just that you might be better off stepping to the side and waiting for some type of value and perhaps even a “V-shaped bottom” that you can start buying.
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