DAX with trend channel break – UBS column

Review: The DAX has been moving sideways since June 5 between approximately 11,960 points on the underside and approximately 13,000 points on the upper side. A breakout attempt on July 20 above the 13,000 point mark already ended on July 21 at 13,313 points. As a result, the DAX quickly fell back below the round mark of 13,000 points and thus slumped out of the long-term rising trend channel, which has been significant since the Coronacrash low at 8,255 points on March 16. So far, the DAX has not managed to sustainably rise above 13,000 points. With the break in the trend channel, the situation for the index deteriorates further, and the strength of the bulls declines after the long run-up.

Outlook: As long as the DAX is listed outside the long-term trend channel, the bears should hold the scepter in hand.

The short scenarios: The DAX cannot recapture the trend channel and remains below 13,075 points even if it tries to recover. As a result, a further downward movement would then start, pushing the DAX below the trend low at 12,811 points on July 27, following the trend. The bears’ first target under the 12,800 point mark would then be the gap still open at the bottom at 12,697 points. If it goes deeper, the support area should start at 12,450 / 12,500 points. Below that, the lower limit of the falling trend channel at 12,300 points would be the goal, where the 50s EMA is currently also going. Under the 50 EMA, the 200 EMA would be the bears’ next target at 12,000 points.

The long scenarios: The DAX can recapture the rising large trend channel and rise significantly above 13,075 points. In this case, a renewed attack by the bulls at the high of 13,313 points would be expected.

Disclaimer: The text is a column of the UBS. The content of the column is not the responsibility of 4investors and therefore does not necessarily have to agree with the opinion of the 4investors editorial team. Any liability and claims are therefore expressly excluded by 4investors!

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