DAX uptrend remains strong

Price at time of writing - 8331.

A near-100-point rise since last week's update has taken the DAX a step closer to achieving my aggressive target.

As with other leading indices, the German index remains well-behaved and on schedule to achieve its next band of Gann-theory resistance centred at 8972.

It appears there may finally be some common-sense returning to the EU parliament. After much senseless debate, EU legislators recently rejected proposals from some members of the assembly to ban fund managers from receiving bonuses worth more than their pay. Curbing bonuses and pay is something we might have expected from an old communist regime in the past. These rejected proposals were nothing more than politics of envy. They were drafted to appear as a popular reform to a marginal electorate still struggling after the banking crisis, but I believe they have no place in a modern, competitive capitalist society. Indeed, governments should be striving to keep their brightest and best young achievers from departing for better opportunities elsewhere. Allowing workers to receive open-ended salaries and bonuses is just such an incentive.

The DAX is keeping a safe distance above its support band defined as 8026-8075. While this remains the case, the uptrend remains firmly intact.

Recommendation: stay long. Target 8972. Stop-losses can be raised to be activated only on momentum below 8000.

DAX chart

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