The German DAX continues to see a lot of upward pressure overall, and at this point in time, I think we are more likely than not in the midst of trying to find our bottom.
DAX Index
The German DAX continues to see a lot of upward pressure overall, and at this point in time, I think we are more likely than not in the midst of trying to find our bottom. The 24,250 Euro level continues to be an area that I think a lot of buyers are interested in, so I look at this as a buy-on-the-dip scenario, and I am willing to take advantage of cheap contracts in the German index. After all, the German economy is doing fairly well, but it will be stimulated by the German government and that should help a lot of these companies.
The one thing that is working against them at the moment is the threat of tariffs, of course, and that hurts international companies exporting to America. That is something to be concerned about, but I think over the longer term we still continue to see a lot of buyers and, therefore, I approach this from a long-only type of standpoint.
Upside Potential and Resistance Levels
If we can break above the 25,000 level, I think we will continue to go higher, but right now I'm comfortable buying this market regardless. There is a gap above the 25,000 level that extends to the 25,400 level, and breaking above there opens up the possibility of a move to the 26,000 Euro level.
All things being equal, as long as we can stay above 24,000, then I think basically the trend is still intact and I don't have any interest in trying to short the DAX. All things being equal, I don't short indices in general, but the DAX I can make an exception for when it really starts to fall apart. Ultimately, this is a situation where I'm trying to find value, and I think we are starting to find it here as I believe in the longer-term move.
Potential signal: I am a buyer here. Stop loss at 24350 and target of 26,300 above.
Ready to trade our stock market forecast and analysis? Here are the best CFD stocks brokers to choose from.