The German DAX 30 Index has been rallying hard on Thursday
Buying calls for the Friday performance of this index could be a very good deal. In light of the amounts of monetary policy easing delivered by the European Central Bank on Thursday we could be in for one very serious rally in European stocks looking ahead.
We would be buying daily calls for tomorrow's expiry around the support level marked on the chart which is attached to our forecast for tomorrow's move of the German broad stock market index DAX 30. Our main goal is to be able to target a move to the upside, however if we see an hourly close below 9650, we would stay away.
Mario Draghi has delivered his speech earlier on Thursday, stating that the monetary policy in the Euro Zone is widely diverging from other major economies. A statement which he has reiterated, repeating it over and over again - a serious commitment to deliver a weaker Euro.
As the Euro is weakening, the Euro Area'a stock markets are rising higher because investors are looking for better places to put their money into than hard currency. As the cash value of the Euro is dropping, there is no reason for holders of shares to start selling those.
Looking at the chart, there are certain risks associated with the development of this trend. The move happens only a couple of weeks before the third quarter concludes. As German companies start to report earnings, there are increased risks that some companies might fall short due to Russian-Ukrainian tensions.
We remain biased to buy daily calls as long as prices do not cross below 9650, then we would be looking for a good opportunity to reverse and reclaim our binary options trading profits. The upside remains open as long as the monetary policy of the ECB remains inflationary.