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Germany’s Leading Stock Index Is Approaching A Critical Breakout Level

Wednesday, February 22, 2017 8:19
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From Taki Tsaklanos: Stock markets in the U.S. are trading another all-time high. Momentum remains bullish in the U.S. In other parts of the world, however, stocks are mostly not at all-time highs. The DAX stock market index, a leader in global stock markets, has not broken out yet, and that has important implications for investors.

The chart below shows the German DAX index. It is a leading stock market globally. It refused to break down in the last 3 years, as indicated by its support (purple support line).

However, the DAX did not manage to break out neither. And this is where it becomes interesting. As long as global stock markets are not able to follow the path of U.S. indexes, there is reason to have a reservation on the global stock market rally. That is because, according to InvestingHaven’s research team, a test of all-time highs in the DAX index is one of the most important indicators for global stock investors.

So far, InvestingHaven’s forecast for a 15 pct rally in European Stock Markets appears to be spot on. Likewise, the India Stock Market Outlook For 2017 is very accurate and the disbelief in a China Stock Market Crash In 2017 as well.

The German DAX stock market index a leading indicator for global stock markets is about to test all-time highs. This should be watched closely by investors. It has a very high importance for global stock markets. Expect resistance initially, but the retracement that follows will be telling.

leading stock market

The iShares MSCI Germany Index Fund ETF (NYSE:EWG) was trading at $27.67 per share on Wednesday morning, down $0.11 (-0.40%). Year-to-date, EWG has gained 4.49%, versus a 5.58% rise in the benchmark S&P 500 index during the same period.

EWG currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #5 of 91 ETFs in the European Equities ETFs category.

This article is brought to you courtesy of Investing Haven.

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