Last week was very successful for German indices. DAX gained in this period over 500 pts and is on the highest levels since August. Gains are helped by Wall Street, S&P is again below 2,100 level. Depreciation of euro is also helping, it is especially seen on EURUSD which tested 6-months low on 1.0600.
This week will be very short on the markets. On Thursday American stocks have work-free day because of Thanksgiving and on Friday it works 3 hours shorter. The biggest volatility we should see only until Wednesday. The most data will be published on Monday and Tuesday. Today we will know German and Eurozone PMI (they were already published and are better than expected) and US home sales. Tomorrow we’ll know GDP of Germany and US.
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On the DAX bulls broke bearish trend line which was there since April. They met next resistance pretty fast, it is 11,150-11,300 pts area. This resistance is set by bearish gap from August and is strengthen by May and July lows. In case of rebound support is at 11,000 pts and next one on 10,500-10,600 pts. Volume was much smaller last week, it can mean that there are no sellers in this market.
On weekly chart DAX we can see that bullish trend line is defended and weekly DTOSC (which works fine on this index) is also quite oversold. Current level is also fibo 78.6% of last decrease on DAX.
Average companies index MDAX is getting even better than DAX. We should observe its behavior because it is consistent with moves on DAX but no so dynamic. On Friday it reached to resistance which is set by highs. There is lack of just 360 pts to improve historic high and MDAX sometimes can “make it” in one session. Of course it is not certain, volume here is also smaller.
