Bigger correction to DAX expected

THE Deutsche Boerse AG German Stock Index (DAX) has seen price levels spike over the past 10 years from 7,000 price levels to above the 10,000 price levels currently. We can also observe resilience in the DAX during the euro zone debt crisis in 2013. Despite the weakening of the German economy, the DAX climbed more than 1,000 points from 7,800 points throughout the year, and subsequently broke 12,000 points in 2015. Even during a subsequent correction in 2016, price levels were firmly supported above the price level of 9,200 points.

Although 2019 had been a great run for the DAX, the failure to reach the psychological price target of 14,000 points indicates a weaker-than-expected bullish momentum and thus the index should be expecting a bigger correction.

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