The key German DAX Index is bouncing between two important trendlines.
All global equity eyes were on the stock of Deutsche Bank (DB) this week as folks opined on the company’s fate – and the effect therein on associated parties. We are bypassing the company as our Chart Of The Day as it has been sufficiently covered elsewhere (plus, we’ve been touching on the issue for months already). However, we are focusing on one byproduct (or victim) of DB’s roller coaster ride. The German stock market has been ebbing and flowing with each and every DB rumor this week. Interestingly, the German DAX has been doing so within the confines of 2 important trendlines, 1 long-term (Up) and 1 short-term (down).
Here’s a close-up of the current DAX situation.
As the charts show, the DAX is presently below the rising post-2011 Up trendline and above the declining post-2015 Down trendline. It actually touched both trendlines in Friday’s chaotic trading. We can expect the DAX to remain in this trendline “limbo” until it decides which direction it ultimately wants to go. And, although we have seen plenty of false breaks of late, when the index does break out in one direction or the other, we believe it may finally lead to a more substantial move this time.
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