FxWirePro: DAX (ger30) enjoys longest weekly bull run since 2015 but that might change soon; enter short positions
Source: FxWire Pro - Commentary / 23 May 2018 05:47:35 America/New_York
GER30, the CFD (Contract for Difference) of German benchmark stock index DAX has been rising steadily since it bottomed around 11700 area in March and this week traded as high as 13200 area. The index has risen for 8 consecutive weeks, which is the longest bull-run for the index since January 2015, when it rose for 10 consecutive weeks from 9600 area to 12200 area.
However, our calculations suggest that this euphoric run of DAX/GER30 is unlikely to last for long. The index is facing selling pressure this week, which we expect to gradually intensify over the next month or so.
In February this year, after several of our bullish targets achieved over the past year or so, in an article named, “FxWirePro Call Review: DAX outlook revised from bullish to bearish”, available at https://www.econotimes.com/FxWirePro-Call-Review-DAX-outlook-revised-from-bullish-to-bearish-1147363 we changed our bullish outlook for DAX/GER30 to bearish over the longer horizon.
Based on our calculations at the time, we suggested that the sharp selloff that shook investors’ nerves is not over and we at FxWirePro wrote, “We would also like to urge our readers to go short on DAX or GER30 at the current rate of 12230 (GER30) with a stop loss at the recent peak of 13600 and an initial target of 11000, which is likely to get extended.”
And, in a follow-up review, https://www.econotimes.com/FxWirePro-Call-Review-DAX-short-side-target-extended-to-10200-stop-loss-revised-1225527 we extended the target to 10200 and revised the stop loss from original 13600 to 12800.
However, charged up bulls have triggered the 12800 stop loss rising on abating risk aversion stemming from trade dispute between the United States and China.
At this point, we would recommend re-entering the short positions as our short to medium term outlook for the DAX remains bearish.
Sell GER30 (CFD of DAX) at the current rate of 12970 with the stop loss around 13650 area and with the target around 11000.© FxWire Pro 2018. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.