Markets

DAX® – Second “inside day” in a row

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Second inside day in a row

The inside staff of the previous day was followed by another “inside day” yesterday. On the second trading day in a row, the trading range remained within the high-low range from the strong start of the week. As a result, the triggers discussed last continue to apply. A spurt above Monday’s high at 12,873 points dissolves the “double” inner bar upwards and can be used by traders to enter the DAX®. However, the overriding motto remains unchanged: “Two gaps – two messages – two alternative courses of action”! In other words: To the north, it is necessary to close the downward price gap from September 21 (12,999 to 13,116 points) in order to negate the trailing edge from the start of the previous week and thereby give the share barometer a sustainable perspective for the fourth quarter. On the downside, however, the most recent upward gap (12,623 to 12,660 points) plays a key role. A slide below this zone would call into question the previous constructive course of the week. Therefore, investors can currently use the price range without a listing as a hedge against flare-up market turmoil.

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DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal

Pullback to old downtrend

The Covestro share coped well with the difficult month of September, despite yesterday’s price losses. While the index was down 1.4% over the course of the month, the individual stock was able to gain a good 6%. So with our analysis on August 24th, we have shown good timing. In the meantime, the title has even been able to fully exploit the mathematical connection potential from the ascending triangle discussed at the time. But the most recent pullback may offer a new entry opportunity because the technical chart prospects remain favorable. On the indicator side, the existing MACD buy signal and the completed bottom formation in the course of the RSI contribute to this. The trend follower can also come up with a positive pattern at a historically low level on a monthly basis. Most important in this context is the break in the bear trend that has existed since 2018 (currently at EUR 42.54), which is currently being retested (see chart). On the upside, a jump above the highs from late October 2019 and September 2020 at EUR 48.18 / 48.82 would underpin a continuation of the rally of recent months. Investors can use the upward gap, the daily basis at 40.50 / 40.30 EUR, as a hedge.

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Covestro (Weekly)

Chart Covestro

Source: Refinitiv, tradesignal

Stage goal reached for the 2nd time

Recapturing the combination of the downtrend since July 2019 and the 38-week line (currently at USD 118.20) has proven to be the expected catalyst for Beyond Meat shares (see “HSBC Daily Trading” on May 8th ). In the meantime, the stock has already been able to approach an important milestone for the second time: After all, the 61.8% fibonacci retracement of the entire bear market from July 2019 to March 2020 at USD 166.55 together with various horizontal hurdles at USD 167 forms an important resistance zone. If the leap over the above-mentioned hurdles is successful, the reward is a run to the high of June last year (USD 201.88) before the previous record high of just under USD 240 moves back onto the agenda. The share continues to receive a tailwind from the quantitative indicators. So the MACD could just generate a positive pattern. At the same time, the share has a high relative strength. The icing on the cake is a constructive candlestick pattern in the form of a “morning star” on a quarterly basis. Investors can pull the stop for existing and new investments to the January high of USD 135.

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Beyond Meat (Weekly)

Chart Beyond Meat

Source: Refinitiv, tradesignal

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