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DAX® – Tense overall situation

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Tense overall situation

The DAX® was able to use the weekly closing for the expected stabilization. The release from the weekly low (12,345 points) was also very important from a technical point of view. To underline this statement, let’s take a look at the weekly chart of German standard values. The most recent lows at 12,342 and 12,254 points, together with the 200-week line (currently at 12,239 points), define an absolute key zone. After all, sliding under this bastion would turn the sliding zone in the summer months into a top formation. Against this background, the holding cluster described is still predestined as a strategic hedge, especially since the German standard values ​​are likely to start the new trading week weaker. Last Friday’s countermovement caused a so-called “swing low” to occur on a daily basis. A low, which is framed by two higher lows, often marks a short-term turning point. This is also an important keyword on a weekly basis: after all, the mirror-image phenomenon on the upper side remains unchanged. In other words, a rise above the previous week’s high at 13,152 points would avert the risk of an upper reversal.

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DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal

High hurdles ahead!

For a long time we have wanted to take another look at the 10-year US yield. Recently, the 50-day line (currently at 0.71%) has repeatedly emerged as a support. The cited smoothing line also acted as a stepping stone for the recent rise in interest rates. But now the interest rate barometer has a massive resistance zone right in front of its chest: First of all, the moving average of the last 200 days (current at 0.86%) should be mentioned in this context. The bundle of barriers extends over the 38.2% fibonacci retracement of the last yield slide from the beginning of the year to March 10 (0.94%) to the striking June high of 0.96%. In the orbit of the last-mentioned mark, there is also a parallel to the base downward trend of the last 40 years (on a monthly basis, current at 0.95%). A jump over these hurdles would be a strong signal – but we currently consider it rather unlikely. Rather we expect in the area of ​​the above Barriers to the formation of a cyclical high return. Overall, the entire price activity of the last few months takes place within the dynamic sell-off candle from March, which at the time brought a yield slide from 1.28% to the all-time low of 0.32%.

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10-year US return (Daily)

Chart 10-year US return

Source: Refinitiv, tradesignal

With a new record high

The United Health share weathered the correction of February / March very well. The stock has even left the extremely stubborn resistance area of ​​the past few months at around USD 300 behind. The reward for the effort is twofold: On the one hand, the paper was able to expand its all-time high to USD 335.65, on the other hand, the entire correction can be interpreted as a “V-formation” (see chart). The depth of the incision in the meantime results in a long-term connection potential of almost USD 120 or a long-term price target in the range of USD 420. The risk of a false breakout on the top is reduced by a Relative Strength Coefficient (Levy) above the threshold value of 1, as well as by the Kelly factor. The latter combines both trend following and money management aspects and currently signals an ideal upward trend. The February high at USD 306.72 offers a close-knit hedge. A stop loss on this basis also guarantees a very attractive risk-reward ratio.

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UnitedHealth Group (Weekly)

Chart UnitedHealth Group

Source: Refinitiv, tradesignal

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