With equity markets set to open higher on Tuesday morning, Steve O’Hare from First 4 Trading is looking to buy the DAX Index. Despite his bearish medium-term outlook, last Thursday’s sell-off combined with the recent release of strong economic data has created a buying opportunity.
China announced that GDP in the last quarter rose to 7.3 percent, beating the previously forecasted target of 7.2 percent. This sign of positive growth coupled with a strong earnings season so far, has reassured investors for the moment. Although the markets opened lower on Monday morning, following the news of disappointing quarterly performance from IBM, the session saw renewed buying interest by the afternoon. This buying interest increased throughout the day as speculation over Apple’s stock boosted the markets. Third-quarter earnings reported early Tuesday morning appeared strong with USD 8.47 billion in earnings and 39.3 million iPhones sold. Rallying off this positive sentiment in the market, Steve is ready to set longs on the DAX to target Fibonacci retracement levels.
He is looking to buy at the market open and 8690. His three targets for the trade are: 8940, 9120, and 9300. A stop can be placed at 8550.
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