The index briefly touched the 12374 point in April of 2015. Friday’s close was at 12312 points, that’s less than 0.5% from all-time highs.
Last month, we alerted readers that the German DAX index is important because it tends to lead global stock indexes. Right now, the index is trading at a decision point, and investors better pay attention to what happens around this price level.
Last year, we came out with a Bullish DAX Stock Market Index Forecast For 2017. So far, the DAX has followed the path higher which we forecasted. Because of that, European Stock Markets started a 15 pct rally.
However, now it becomes very interesting because a breakout is not given at this point. A double top is still in the cards. This is not a time to become very aggressive although it is still a possibility that the DAX breaks out.
The key takeaway is whether the DAX will or will not break out. That is not only important for investors that are envisioning positions in Germany, but also in Europe and even global stock market investors.
A failure to break out above 12300 for at least 3 consecutive weeks will be huge. The opposite is true as well: if the 12400 level is cleared for at least 3 weeks in a row, then the breakout would be for real.
The iShares MSCI Germany Index Fund ETF (NYSE:EWG) closed at $28.75 on Friday, up $0.12 (+0.42%). Year-to-date, EWG has gained 8.57%, versus a 5.46% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Investing Haven.