The DAX is trading higher in today’s afternoon session, with the index building upon its momentous gains from Frida. Earlier this morning Germany released its monthly Ifo Business Climate report which surprisingly the numbers jumped to 104.7, from 103.2 reported last month.
Of course this is tremendously positive, and subsequently is causing quite a few analysts to believe that the German economy might be showing its first signs of clawing back from stagnation. Additionally, comments from ECB chief Mario Draghi stating that the ECB will do whatever it takes to support the flailing Eurozone economy is certainly beneficial for the index. Most economists believe that the ECB will unleash its own form of Quantitative Easing as early as December. Traders should note, a loose monetary policy is almost always considered to be bullish for equities around the globe.
Furthermore, the surprise interest rate cut by the People’s Bank of China in order to stimulate growth should prove to be a fine boost for German equities, as Germany is one of China’s foremost trading partners.
When looking at the hourly chart for the DAX, the index is in a very strong upwards trend. Additionally, its momentum indicators are providing, emphasizing a shift in towards the buy side. Lastly the DAX’s relative strength index is continuing to trend higher, which is of course a bullish sign for the index in the short-term.
Long the DAX at current levels for an intermediate target at 9920, with a strict stop-loss below 9760.