Markets

DAX like on rails: 13000 in focus

The DAX is fighting slowly but steadily (ISIN DE0008469008 | WKN 846900) further up and hit the 13,000 mark this week. As in the previous week on ariva, the DAX started the week dynamically. Around 100 points from the strong opening on Monday to the end of Friday were on the course slip. In the meantime (on Tuesday) we saw another sale up to 12,535 points. But from this point on, the mood to buy returned impressively and on Wednesday brought the breakthrough over the outlined resistance zone by 12,850 points.

The result was a start of the 13,000 mark, in fact a new high since the end of February at 12,999.84 points. This level was no longer exceeded in the further course and thus represents the current resistance visually and psychologically:

DAX resistance range below 13,000

The weekly gain of 2.3 percent was based on the hope of finding an antidote to Covid-19 and especially at the end of the week on the positive outlook at Daimler. Here, the quarterly result of EUR 1.68 billion was clearly negative, but above analysts’ expectations. The focus was on the positive effect of austerity measures in the future and ultimately caused enthusiasm among investors. In detail, there are up to 20,000 jobs to be saved.

In addition, a result from the EU special summit in Brussels is eagerly awaited, at which another billion-euro program to deal with the Corona economic crisis is under discussion.

Overall, if one describes Tuesday as a “slip”, a positive weekend tendency, which was shown in detail as follows:

Looking back at DAX week KW29

Here is a look at the individual DAX trading days:

DAX trading days of KW29

The larger chart picture has not changed, the DAX upward trends can be clearly seen in the medium-term timeframe:

DAX medium-term with upward trends

If you analyze a larger time frame in the DAX, the start at around 13,000 is another positive signal. We were at this price level for the last time at the end of February, when the corona crisis started to react on the stock exchange. We were able to run up to 12,913 points in the first week of June. The imagination of the 13,000 escaped in the market, but now it has sprouted again. The June high was surpassed and by the closing price on Friday we are right on this threshold after a new start:

DAX situation comes to a head

With the trend line since mid-May as support, the DAX could continue its momentum and already jump the 13,000 in the new trading week. I consider a corresponding short-term signal to be relevant when the 12,970 is exceeded.

A reorientation of many market participants can be expected in the immediate vicinity of this round brand, since psychological brands often lead to new decisions and thus to shifts in the market. I am therefore trying to trade short-term signals in the environment of this round brand.

Every day I provide my trading ideas free of charge via email here.

A drop below 12,850 points would be an indication of the rebound in this region. Here, in the course of profit-taking, not only could the upward trend outlined break, but the GAP of Wednesday could become the focus of traders:

GAP in the DAX below 12,770 points

Below 12.770 this is still visually visible and, as a so-called “island gap”, cuts Tuesday as a trading day from the further course of the price. If we penetrate this region, the bears could exult and generate further sell signals on the chart.

In the recent past, we have seen how quickly the mood change between further fear in the corona crisis and the hope of a breakthrough in drug research can be. Therefore, pay attention to the corresponding news and announcements as well as the following business dates in the coming week.

The producer price index from Germany is on the agenda for the new week at 8 a.m. on Monday. In the afternoon there will be various speeches on the economic situation from England.

The Chicago Fed activity index at 2:30 p.m. is particularly important on Tuesday.

On Wednesday we look forward to the US real estate sector at 3:00 p.m. with the publication of the corresponding index on a monthly basis.

With Gfk consumer confidence from Germany, there is another indicator for assessing the domestic economy at 8:00 a.m. on Thursdays. In the further course, the first US applications for unemployment benefits will be exciting again at 2.30 p.m.

Extensive data await us on Friday, especially from the UK – with Gfk consumer confidence and retail sales in the morning, the last trading day of the week begins. The Markit PMI overall index supplements the picture for Germany with the German Purchasing Managers’ Index at 9:30 a.m. At 10 a.m. this data will be published at EU level, 10:30 a.m. for England and 3:45 p.m. for the USA.

You can see all the forecasts for these selected business dates in the following infographic.

Business dates KW30 / 2020

Start the new trading week well with this preparation and your own ideas.

Good luck to you Bernecker1977 (Andreas Bernstein)

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Risk warning: Trading in financial products is risky. You can lose your invested capital. This analysis is not a trading recommendation and only contains non-binding analyzes and forecasts of current and future market conditions. All information given in this publication is provided for information. They should not be understood as an offer or recommendation for investment decisions.

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