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DAX Forecast: German Equities Look Likely to Continue Higher


 

The DAX has pulled back just a bit during the course of the trading session on Thursday but continues to see buyers underneath to push this market to the upside. This is a market that continues to see a lot of noise in this general vicinity, with the 50 day EMA sitting just below and curling higher. The DAX has been a leader for a while, and now it looks as if we are ready to continue going towards the €16,000 level. Any pullback at this point in time seems to be thought of as a buying opportunity.


The German index is highly levered to the reopening play as there are a lot of major industrial corporations that make up the majority of the group. That being said, the market is likely to continue to see a lot of bullish pressure underneath, and if we continue to see the reopening trade be favored, the DAX of course will be one of the major beneficiaries. With this being the case, I think that any dip towards the 50 day EMA has to be looked at as a gift, and the recent break out could even be looked at as a potential bullish flag kicking off, meaning that the measured move also suggests that we are going to go to at least 16,000, and possibly even higher.


The 200 day EMA sits just at the 15,000 level, and should continue to offer plenty of support. I think as long as we can stay above there, then you have to look at the idea of any pullback as a gift, and as such you have to remain bullish. If we were to break down below the 200 day EMA and of course the €15,000 level, one would have to start to look at this market through the prism of something drastically changing. If that is going to be the case, then the indices around the world would start to fall, it would not just be the DAX itself. With this in mind, I do think that it is much more likely that we go higher than lower, and with that I am of the mind to remain bullish, unless of course I see some type of massive meltdown in other markets. Currently, that does not look to be the case and therefore I remain steadfast.

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