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Dax – Where it is going from here ?


German economy is doing fairly well, its latest data, the export figure surge 7.3% higher than February. Somewhere I was reading that this increase figure is highest from when they are recording data. Germany’s concern is now about the PIGS, as how to save Greece  e.t.c. 

DAX has already tried to test  7600 level twice this year, last time it was close to go past 7600 level but it eventually failed. Some indicators are saying that German index DAX is in slightly over-bought condition. For DAX it’s near by good support is at 7200 level. Its 200 day EMA is far below level. I am expecting it to again go and test the resistance at 7600 level in coming days. Last week statements from ECB about interest rate spoiled it’s move.
Now if we compare Germany’s DAX index with its neighbor France’s  CAC, then we can better understand where DAX is.  

As we can see  CAC couldn’t able to cross its February high. On the other side DAX  was able to correct more than December 2010 level in march this year, but CAC couldn’t, though I said in past that I was expecting some more corrections in DAX. But now it is over. So comparing that, DAX is in better condition than CAC.

Now in spite of good environment why DAX is not crossing 7600 level?

I think over all market sentiments in the world is negative, as last week’s crash in commodity market is still in the mind of investors. Without commodity crash there were some bad downgrades and negative outlook haunting many countries. Yes definitely the shadow of PIGS countries are there on Germany and also there are inflation and rate hike concern in Euro area. But believe me if environment makes a little improvement, DAX will be performing far better from other developed countries. As far as over-bought matter, I think many of the markets of the world are now in over-bought condition. In spite of bad economic conditions many are performing in the upside, then with good economic matters DAX deserves something better.



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