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DAX® – skepticism helps the market

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Skepticism helps the market

The DAX® moved sideways yesterday in a narrow trading range of only 130 points. The stock barometer allowed itself a little breather, but this development can also be seen as a positive side. Finally, the German standard values ​​were able to defend the price gap from the day before yesterday (lower gap edge at 13,064 points). At the same time, the stock barometer established itself above the round price mark of 13,000 points. As long as the gap described persists, there is a chance that the large downward price gap from the end of February (upper gap edge at 13,501 points) will be completely closed. We still see the subdued mood as a supporting factor. According to the latest sentiment survey by the American Association of Individual Investors (AAII), the proportion of bears among American private investors remains at a very high level of 46.8%. At the same time, the percentage of optimists (26.1%) has dropped significantly and is listed at a low level in the historical context. As the bull market is dying of euphoria, these values ​​encourage us to continue the current rally.

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DAX® (Daily)

Chart DAX®

Source: Refinitive, tradesignal

Long-term trend reversal accomplished

With the jump above the average of the last 38 quarters (currently at $ 19.99) and the multi-year high of September 2016 at $ 21.11, the silver price recently managed to complete a multi-year bottoming (see chart). The current turnaround in indicators is giving tailwind to the discussed turnaround. There is also a lower reversal pattern in the course of the RSI. At the same time, the MACD recently generated a new entry signal. Speaking of MACD: The trend follower is now to be interpreted in a friendly way not only on a quarterly but also on a monthly and weekly basis. In all three long-term time levels, the traffic light is “green”. The calculated minimum price target from the large, lower reversal of recent years can be estimated at around USD 28. On the way to this region, the various quarterly lows of 2011 and 2012 at around USD 26 define an important milestone. As a strategic safeguard on the bottom is the above. long-term average predestined, because its rebreak would also negate the bottoming described above in the last six years.

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Silver (Quarterly)

Chart silver

Source: Refinitive, tradesignal

You should know this signal generator!

The strategic price drivers in the form of a classic correction flag as well as the inverse shoulder-head-shoulder formation of recent years have recently raised the Barrick Gold share to a new 7-year high (USD 28.84). The gold mine title is scratching an important key chart technical point. This refers to the combination of the highs from May and April at $ 28.36 / 28.50 and the 138.2% fibonacci projection of the bear market impulse from 2016 to 2018 at $ 28.80. A sustained jump over these hurdles would ensure that the ongoing rally is reaffirmed. The lower reversal mentioned at the beginning and the indicators to be interpreted in a friendly manner (e.g. MACD, Aroon) suggest the positive course described. If successful, the low of July 2012 at USD 31 defines an important milestone. In the long term, the connection potential from the above S-K-S formation even close the late 2012 price gap at $ 38.00 / $ 38.24. As a hedge in the event of an outbreak, the current July low at $ 25.88 offers itself. Close hedging on this basis also ensures an attractive risk-reward ratio.

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Barrick Gold (Monthly)

Chart Barrick Gold

Source: Refinitive, tradesignal

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