Trade of the week: long DAX 40
Following the DAX 40’s December-to-January correction lower, it might be interesting to buy the index with a stop loss below its current January low at 16,440 and an upside target around 17,140.
(AI Video Summary)
Last week's NASDAQ 100 trade update
This week's "Trade of the week" analyses two trading opportunities; last week's trading on the NASDAQ 100, and this week's trading on the DAX 40. Let's first talk about the NASDAQ 100 trade. Axel Rudolph explains that he made a successful trade by going long on this index, which means he expected it to go up in value. He used technical analysis to determine his entry point, which was when the market bounced off a strong support level. He entered the trade at around 16,272 and set a target of 16,772, which has already been reached. However, Rudolph advises that if someone is still in this trade, they don't need to exit yet because the trend is still going up. He even suggests moving the take profit stop higher to reduce risk. This trade has been profitable, with gains of about 500 points.
This week's trading opportunity
Now let's move on to the current trade idea on the DAX 40, the German stock index. Rudolph points out that this index has been rallying since October but has been trading in a sideways range since mid-December, with a high around 17,000. He sees the recent decline as a correction before the index goes back up to the previous high and possibly even makes new all-time highs. However, he wants to enter the trade at slightly lower levels to minimise risk.
So, his proposed trade is to go long on the DAX 40 index at around 16,640, meaning he expects it to go up in value. He suggests setting a stop loss at 16,440 to limit potential losses if the trade doesn't go as planned. He also provides an upside target above the all-time high, around 17,240. In other words, he believes there is potential for profits if the trade works out.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
