DAX® – 13,000 – temporary or permanent?


HSBC Daily Trading

13,000 – temporary or permanent?

The DAX® was able to convert the good targets yesterday into a spurt over the most recent highs at 12,800 points. It is particularly noteworthy that our signal transmitter was completed with an upward gap at 12,753 / 12,803 points. For today, the targets are more modest, so that there should initially be a pullback in the direction of the aforementioned breakout marks. From a trading perspective, the price gap described defines a first important retreat zone in any case. However, the share barometer was unable to save the daily high of 13,046 points yesterday across the finish line. As a result, the German standard values ​​were unable to return to the old recovery trend since December 2018 (currently at 13,007 points). A successful course would lend additional emphasis to the upward trend that has been taken. Then the high of June 21 at 13,314 points comes back into focus. This level marks the beginning of the large price gap from February, which extends to 13,501 points. Tailwind continues to come from overseas, where Dow Jones® and Dow Jones Transportation® have already posted new highs (see analyzes below).


DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal

Gap closing becomes a realistic option

At the beginning of the week, the Dow Jones jumped to a new high (28,155 points). Investors can already book this course as proof of their technical strength. But it gets even better: The most recent upward gap at 27,456 / 27,488 points “cemented” the return to the former base upward trend since March 2009 (currently at 27,339 points). In addition, the price development since the beginning of June can be interpreted as a classic triangle pattern. This consolidation pattern also signals the “green light” for the American standard values. Since the majority of the indicators (e.g. RSI, MACD) can also be interpreted in a friendly manner, the dynamic rally is likely to continue since the end of March. The Dow Jones® should therefore tackle another price gap as its next project. What is meant is the February trailing edge (28,403 / 28,893 points), which got the spring correction rolling. From there it is only a blink of an eye to the previous all-time high of 29,569 points. As a safeguard, the above mentioned. Base uptrend on.


Dow Jones Industrial Average (Weekly)

Chart Dow Jones Industrial Average

Source: Refinitiv, tradesignal

With a new all-time high

The Dow Jones Transportation also recently posted a new high. The consistency required by the “Dow theory” between the transport stocks on the one hand and the Dow Jones Industrial Average on the other is therefore fulfilled. In this very promising environment, we would like to take a close look at Union Pacific, a classic transport share. Ultimately, the paper was able to defend the 38-month line (currently at USD 152.48). Nevertheless, since April 2019, market participants have regularly left their courage at a good 180 USD, so that an important resistance arose at this level. The Union Pacific share has now lifted this cap. The reward for the effort is a new all-time high (193.89 USD) and thus one of the best signals in technical analysis. The breakout on the upside is underpinned by a downtrend break in the course of the relative strength (Levy). In the uncharted territory, the 138.2% fibonacci projection of the spring setback marks the next target at USD 221. In order not to jeopardize the steep rise described, the uptrend since 2009 (currently at USD 170.79) must no longer be undercut.


Union Pacific Corp. (Monthly)

Chart Union Pacific Corp.

Source: Refinitiv, tradesignal

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