DAX Index: Another Gap Higher as Investor Optimism Grows

Investors in the DAX Index are enjoying the holiday season, as trading the last two days has produced gaps higher when the market has opened. While trading volumes are lower than normal, this has not kept away all market participants, and clearly some financial houses are engaging in buying as the German index continues to display signs of enthusiastic surges upward.

Record high levels are being attained and resistance of 13900.00 is clearly being targeted. The DAX Index may be enjoying the fruits of the newly attained trading deal between the UK and EU, which will allow German corporations to rest easier and financial institutions to have a clear outlook regarding future economic foundations.

The DAX Index is also benefiting from the optimistic display of buying taking place within US equity markets. Speculators who are looking for reversals lower to participate in the markets and have buying positions in place may be taking the correct cautious path, but they also might not catch the trend if they position themselves too far away from current market values.

US future markets are indicating a positive opening, and this may create a foundation of support for the DAX Index and keep profit takers tentative and inactive. The current price of the DAX Index is near the 13855.00 level and because of lighter than normal trading volumes, the market is susceptible to sudden gyrations, but buyers are obviously targeting resistance levels near the 13900.00 mark.

Speculators waiting for pullbacks in the DAX Index in order to go long cannot be blamed, but they should also be prepared to become buyers if they see a sudden bullish trend emerging and fear that it may be getting away from them. If the DAX Index is able to break key resistance at 13900.00 and sustain its values above this level, the market will definitely begin to contemplate the key psychological level of 14,000.00 as the next logical focal point.

Holiday trading volumes make the DAX Index a speculative wager near term, but positive bullish momentum should be monitored. Speculators who want to participate in the DAX Index cannot be faulted and, if financial institutions remain buyers, going long the German index and anticipating further gains higher short term is the logical choice.

DAX Index Short-Term Outlook:

• Current Resistance: 13900.000
• Current Support: 13819.000
• High Target: 13975.000
• Low Target: 13776.000