Europe Stock market on the right track

Europe Stock market on the right track

        DAX make an over 10% correction since April due to sudden sell off of Bund. I expect Europe stock market had resumed the rising trend by observing several indicators. Trader should not overlook it and trade on this trend.

        Figure 1: DAX underwent over 10% correction.

Source: Barchart.com

        Figure 2: Percentage of DAX stock over 50 day moving average hit a oversold level.

Source: IndexIndicator.com

        Figure 3: The reward to risk ratio is high after a 10 correction in DAX.

Source: Nautilus Research

        Figure: 4: Sentiment towards DAX also hit a pessimistic level.

Source: Animux

        Figure 5: Europe still have a impressive growth in next half of year.

Source: Nordea Market and Marcobond

        My takeaway is that oversold and pessimistic sentiment will trigger a impressive rally of Europe stock market. In addition, the fundamental is solid under easing environment and expansion phase in economy.