The DAX continues to struggle to break through the 13000 region and the whole of last week was spent trying to do that with no success. As we have been mentioning a few times in our forecast, we dont see 13000 as anything but a psychological mark and the fact that the market is taking so much time to break through this region shows how uncertain the bulls are and how the momentum is lacking in the market.
DAX Very Close to Breakout
This also raises the risk that the bulls might ultimately get tired due to the lack of momentum and switch to profit taking which would lead to a correction in the index and could make the 13000 region even more difficult to push through in the short and medium term. Thats why we have been saying that it is very important that the bulls gather some momentum from somewhere pretty soon and make the push through the region and also ensure to make it stick for the short term so that they could continue to build on it.
We have said that if the breakout through the 13000 region happens in a clean manner, then that opens the possibility of the breakout continuing to push higher in the short term and then the targets would be 13200 and 13500 during this period. But every passing day is a danger as far as the bulls are concerned as they expose themselves to the risk of a correction.
Looking ahead to the rest of the day, we do not have any major news from Germany but we have the UK PM May travelling to Brussels for the Brexit talks which have reached a stalemate. We do not know whether this would be viewed positively by the markets in the coming days. We expect a steady and strong opening for the DAX today and we believe that, considering how close the DAX index had ended the day below the 13000 region, we could be seeing a breakout in the index later in the day.