DAX index
The German Dax index is on a tear higher recently. In 2021 so far, it has outperformed its U.S. peers, despite the lag in the vaccination campaign in Europe.
However, Europe, and Germany in particular, has started the second quarter with record numbers of adults being vaccinated on a daily basis. If Europe manages to keep the current pace, the Dax index and the other European indices should remain well bid as we head into the European summer.
The euro has corrected from its 1.23 highs against the dollar seen at the start of the year, although it is back above 1.19 recently. A weaker currency should help the stock market, so this is another factor to consider when trading the Dax.
From a technical perspective, a bullish flag appears to form at the highs. The measured move equals the distance prior to the flag’s formation, projected from the highest point in the flag pattern.
As such, bulls may want to wait for the Dax index to break and close on a daily basis above the recent highs. A move like this should trigger more upside. The invalidation point should be a move below the lowest point in the flag, and the target should exceed 16,400.
