Market News & Analysis

Top Story

The Clear Line In The Sand For DAX Traders

Nobody is denying DAX has been a strong performer of late. Yet with signs of exhaustion at the highs after a relatively strong move, mean reversion could be on the cards before its next leg higher.

Year to date, DAX rallied just over 28% which places it in a technical bull market (with +20% being the threshold). If it can rally another 3% from current levels, it hits a record high. Yet we’ve seen in the past that rallies of around 8-9% relative to its 20-day low has triggered a correction over the coming week/s. So that we now see prices consolidating at their highs after a 10% rally from its 20-day low, it’s a candidate for a correction, with yesterday’s bearish pinbar suggesting bulls are becoming fatigued over the near-term.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.