Markets

DAX® price index – the big picture – switching point 5.600

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HSBC Daily Trading

The big picture – switching point 5.600

The DAX® started the new trading week successfully. For the first time since the end of February, the stock barometer closed above the 13,000 mark. But not only the performance index, but also the DAX® price index – i.e. without taking dividends into account – is listed in the haze of a decisive signal threshold. This means the last key zone mentioned at around 5,600 points (see “HSBC Daily Trading” from June 29). The lows formed here mark the neckline of an old top formation from 2018. At the same time, two different Fibonacci retracements (5,454 / 5,644 points) and the 38-month line (currently at 5,581 points) underline the importance of this key zone. We even go one step further: The resistances listed mark the last important barriers on the way to the previous record level of around 6,400 points. A sustained jump above the 5,600 point mark therefore lays the foundation stone for a run-up to the all-time high of 6,444 points. Against this background, the chart performance of the DAX® price index may provide an important argument for continuing the ongoing rally.

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DAX® price index (monthly)

Chart DAX® price index

Source: Refinitive, tradesignal

One wheel engages in the other

The silver price has been up and running in recent weeks. This enables the precious metal to capitalize on the extremely promising starting position that has been repeatedly described recently. The “golden cross” – ie the positive pattern of the smoothing lines of the last 50 and 200 weeks (currently at $ 17.14 / 16.45) – together with the constructive seasonal phase, is an important driving factor Sprints above the February high of $ 18.94 for the key stock. This means that the latest price development can be interpreted as a “V-shaped” reversal pattern (see chart). At the same time, this relief strikes a positive resolution of the “hammer”, which has been discussed several times, on a half-yearly basis. The highlight of this course is without a doubt that a completed V reversal implies a price target well above the multi-year high of 2016 at USD 21.11. The last-mentioned level is of crucial importance in terms of “strategic bottom-up”. The rise above the USD 19 mark is therefore an important sign that the large bottoming of recent years should also succeed. Their target price can again be estimated at around USD 28.

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Silver (Weekly)

Chart silver

Source: Refinitive, tradesignal

With a new all-time high

Wheaton stock should also benefit from the promising starting position for the silver price and the positive seasonality. The paper knows how to please even outside of these framework conditions. The strategic course drivers in the form of an inverse shoulder-head-shoulder formation and an elongated correction flag are now even adding a new all-time high (USD 49.71). This creates one of the best signals in technical analysis. In the “uncharted territory” beyond the 2011 high of USD 47.60, the 138.2% Fibonacci projection of the entire bear market from 2011 to 2016 at USD 61.95 defines one of the few remaining start-up targets. On the way to this region, the height of the above-mentioned Flag still an important milestone at around $ 55. But the current chart performance also serves as an important guide for investors from a risk perspective. While traders are using the described breakout situation for close hedging based on the old record level ($ 47.60), strategic investors are giving their commitments a little more breathing space by stopping at the 2012 high ($ 40.91).

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Wheaton Precious Metals (Monthly)

Chart Wheaton Precious Metals

Source: Refinitive, tradesignal

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