The DAX index is wavering today even after the Angela Merkel administration pledged to ease lockdown restrictions. The index is also reacting to the latest reorganisation that will see Beiersdorf exit.
What happened: In a statement yesterday, Angela Merkel announced that the government will ease many restrictions and allow businesses to operate. The reopening plan will have five stages, each having 14 days.
Also, there will be a break system if the number of coronavirus cases start rising. Still, these measures have not had a major impact on the DAX index. For one, most of the constituent companies like Daimler, Volkswagen, and BMW make most of their money abroad.
The DAX is also reacting to the latest reorganisation. In a statement today, Deutsche Boerse announced that Siemens Energy will enter the index. The company manufactures products like power turbines, generators, solar products, and windmills, among others.
Still, Siemens Energy is a struggling company whose demand has been declining for years as many countries turn to renewable energy. The company will replace Beiersdorf. Later this year, about 10 more companies will enter the index.
Other DAX index companies to watch are Henkel, Merck, and Vonovia that will publish their earnings.
DAX Index technical outlook
The daily chart shows that the German DAX has been in a tight range recently. It has found a substantial resistance after it reached a high of 14,218. It has also formed an ascending triangle pattern that is shown in purple. The index is slightly above the 25-day and 15-day moving averages.
Therefore, with the triangle pattern close to its convergence, the index will likely break-out higher. This performance will be invalidated if it moves below 13,600.
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DAX technical chart
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