Tag: equities

German DAX – Mind the weekly double bottom

German DAX – Mind the weekly double bottom

Technical Analysis
From the update on German DAX a few weeks ago, the index which was trading at 10009 managed to turn around from the lows to close last Friday at 10188.4. The equity index was supported by the fact that the ECB had signaled its willingness to expand the sovereign bond purchases. Although nothing was confirmed, the fact that the option is now on the table has been supportive for the German DAX Index. It remains to be seen if indeed the ECB will expand its balance sheet and of course, it all depends on how the Eurozone data continues henceforth. So far, the markets were surprised with a pickup in the Eurozone GDP which increased to 0.4% for the second quarter, beating estimates. However, inflationary pressures remain to the downside especially in light of Crude Oil prices being forecasted...
German DAX could soon turn bearish

German DAX could soon turn bearish

Technical Analysis
The German DAX along with major world equity indices plunged the last week. For the week, the German benchmark index fell -9.35% after enjoying a strong first half of the year. The DAX index gained a total of 30.69% from the start of the year rallying from the yearly open at 9719 to test the highs of 12416 largely fuelled by the ECB's quantitative easing program. The rally continued on until April which was when the index started to post lower highs. To date, the DAX has wiped out -18% of the total gains made this year and looks poised for further downside in the near term. Since this year, the DAX has formed a strong inverse correlation to the EURUSD and the highs and the lows in both the currencies coincided strongly. With the view that the DAX could push lower in the near term outlo...