Investors seeking momentum may have Recon Capital DAX Germany ETF (DAX Quick QuoteDAX - Free Report) on radar now. The fund recently hit a new 52-week high. Shares of DAX are up approximately 31% from the 52-week low of $23.6/share.

But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.

DAX in Focus

DAX focuses on providing exposure to the German equity markets. It charges 45 basis points in fees per year. Consumer Cyclical, Financial Services and Healthcare are the top three sectors of the fund, with 18%, 16%, and 15% allocation, respectively. It has top holdings in Siemens AG, Bayer AG and SAP SE with 9.4%, 9.2%, and 8.8% allocation, respectively (as of Oct 3, 2017) (see all European Equity ETFs here).

Why the Move?

The move can primarily be attributed to the decline in Euro. Catalonia held a referendum of independence on Oct 1, 2017 in order to separate from Spain despite court ruling declaring it illegal. Euro has been declining owing to the uncertainty in Spain. A prospective independence for Catalonia will be a major blow to both parties economically. Declining euro is beneficial for German businesses owing to the high dependence on exports. A cheaper euro makes exports appealing for foreigners.

More Gains Ahead?

Currently, DAX has a Zacks ETF Rank #3 (Hold) with a Medium Risk outlook, so it hard to get a handle on its returns. However, it has an impressive weighted alpha of 26.10. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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