DAX Index analysis ahead of Deutsche Bank and Adidas earnings

The DAX Index has staged a strong comeback in the past few weeks and is closing in on its all-time high as European indices become a safer haven than their American counterparts. It bottomed at €18,488 earlier this month and then rebounded to its current level of €22,000.

The blue-chip index that tracks the biggest German companies has held steady as investors remain hopeful that the US will reach a deal with the European Union. Without a deal, many DAX constituents will continue paying substantial levies to sell to their American customers. 

The index has also done well as the European Central Bank (ECB) has signaled that it will continue cutting interest rates to support the economy. Stocks do well when a central bank is slashing interest rates as this usually pushes more people from the lower-yielding bonds.

Most importantly, the German DAX jumped as the government announced that it would boost spending on defense and infrastructure. 

Top DAX Index earnings ahead

The DAX 40 Index will be in the spotlight in the coming weeks as many of its constituent companies publish their financial results. 

These earnings have started well. On Wednesday, SAP, the biggest company in the index, reported strong financial results, pushing its stock higher by over ten percent.

The company said that its operating profit rose to €2.5 billion in the first quarter, while its revenue soared by 11% to €9 billion. This growth was driven by its cloud business whose backlog jumped by 29%.

The management has stated that it expects its business to continue performing well, even as tariff jitters persist. That’s because it has tools that companies need to manage their supply chains well.

More companies in the DAX Index will publish their financial results next week. Deutsche Boerse, the €58 billion giant, will be the first one to publish its numbers next week. Its numbers come as the stock has jumped to a record high, making it one of the best performers in the index. It rose to a high of €280, up by 87% from its lowest level last year. 

Deutsche Boerse stock has jumped because of the resilience of the German market even as the economy improves. Its annual results showed that the net revenue jumped to over €5.8 billion, while the EBITDA jumped to over €3.3 billion. 

Deutsche Bank, Germany's largest lender, will release its numbers next Tuesday. Like other European banks, Deutsche Bank’s stock has jumped to $25, up by 265% from its 2022 lows. It has benefited from high interest rates and the restructuring efforts made by Christian Sewing. 

Automakers like Mercedes-Benz, Volkswagen, and Porsche will also publish their financial results next week. Their numbers will provide more information on the impact of tariffs on the business. The other top companies to watch will be Deutsche Post and Adidas. 

DAX Index technical analysis

DAX chart | Source: TradingView

The daily chart shows that the German DAX Index has performed well over the past few weeks, jumping from a low of €18,488 earlier this month to €21,760. It has formed a V-shaped recovery and moved above the 50-day and 100-day moving averages.

The index has moved above the strong pivot reverse point at €21,250 of the Murrey Math Lines. It has retested the weak, stop & reverse point. 

Oscillators like the Relative Strength Index (RSI) and the MACD indicators have risen. The stock remains above the Ichimoku cloud indicator. Therefore, the stock will likely continue soaring as bulls target the all-time high of €23,485, which is about 8% above the current level. The stop-loss of this forecast is the major S&R level at €20,000.