DAX 40 Price Outlook: Siemens Positive Q1 Results Sends the Index Higher

The DAX 40 Price Outlook: Siemens Positive Q1 Results Sends the Index Higher
The DAX 40 Price Outlook: Siemens Positive Q1 Results Sends the Index Higher
European stocks rallied after Germany’s largest company, Siemens, reported strong first-quarter earnings. The DAX was the top performer among the world’s major bourses on Wednesday, with the Frankfurt index up 0.8% and London’s FTSE 100 gaining 1.2%.

The market is choppy as investors weigh the effects of rising interest rates and a falling US dollar on Europe’s biggest economy, and as the latest round of US tech earnings paints a mixed picture. Investors will also wait to see how Tesla’s earnings come out after the markets close.

DAX 40 Technical Analysis
The DAX 40 Index is up 23% from September’s low, but the rally has stalled and it’s currently trading in a mildly upward sloping trading range. Its Relative Strength Index (RSI) has reached overbought territory, which is a sign that a pullback to unwind the overbought momentum conditions might occur soon.

The DAX is capitalisation-weighted, so bigger companies will affect the level more than smaller ones. The index’s main constituents are mostly outward-facing and dependent on international sales for profit. But it does include several large, local companies that could be affected by geopolitical tensions, including BMW and Volkswagen. Traders should also consider the euro’s strength, which is often an indicator of how well a country’s economy is doing.