Markets

DAX® – End of Lethargy: Attempt to Break Up?

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End of lethargy: attempt to break up?

With a below-average trading range of just over 120 points, the DAX® also formed a candle with a small body yesterday. However, due to the weak specifications, we rate this development as a success. At least the stock barometer is thus above the 50-day line (currently at 12,889 points). Since the stock markets will receive a tailwind again from October 10, also under seasonal aspects, we currently favor an attempt to break out on the upside. We take the development of the Dow Jones Transportation, which posted a new all-time high yesterday, as a hint. A sustained jump over the 11,700 point mark would have the charm that the resistance zone would also be history since the beginning of 2018. However, in order for the DAX® to have sustainable prospects for a possible year-end spurt, it is necessary to close the downward price gap of September 21 (12,999 to 13,116 points), which is extremely important in terms of chart technology. The short-term correction trend since the beginning of September (currently at 13,032 points) has also been in this price band, which underlines the importance of the zone mentioned.

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DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal

Seasonal tailwind: golden October?

For the telecommunications sector – as measured by the Stoxx® Europe 600 Telecommunication sector index – October traditionally represents a seasonally favorable phase. Due to this cyclical support factor, we examined the seasonal framework conditions for the Deutsche Telekom share more closely. And indeed: sector and individual stock developments fit together. Based on the data since the beginning of the millennium, the telecom stock rose by an average of 5% from October 12 to the end of October. Pure performance, however, is only one side of the coin – the other is the probability of rising prices. At 70%, the hit rate is also very good. The seasonal tailwind described above could therefore help to steer towards the highs of the last four months, which were all in the range of around EUR 15.60. In the long term, the title is still working on a huge bottoming out that has been going on for almost two decades. In the course of the potential lower reversal, the paper forms a correction flag. Their resolution upwards (flag limitation active at EUR 16.39) would provide an early indication of a major liberation blow.

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Deutsche Telekom (Monthly)

Chart Deutsche Telekom

Source: Refinitiv, tradesignal

Successful hurdle!

In the current week, Beyond Meat shares sped above the resistance zone from the 61.8% retracement of the entire bear market from July 2019 to March 2020 ($ 166.55) and the various horizontal hurdles at $ 167. This will make the last discussed catalyst a reality (see “HSBC Daily Trading” from October 1st). From a technical chart point of view, the price development since mid-May can be interpreted as a sideways sliding zone between around USD 120 and a good USD 165 (see chart). The title receives additional tailwind from the quantitative indicators. So the MACD was able to generate a positive pattern last. At the same time, the share has a high relative strength according to Levy. From the height of the above Trading range results in a calculated connection potential of around 45 USD. Looking ahead, Beyond Meat shares should therefore target the June 2019 high (USD 201.88). Beyond this level, only the previous record high of almost USD 240 remains as further resistance. From a risk perspective, investors can limit the stop loss to the above Pull out breakout marks at around USD 167/165 and secure previously accrued profits.

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Beyond Meat (Weekly)

Chart Beyond Meat

Source: Refinitiv, tradesignal

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