DAX® – breather after 1,800 point rally?


HSBC Daily Trading

Breather after 1,800 points rally?

We expected a continuation of the high upward momentum at the start of the week, but what was to follow for the DAX® eclipsed even the expectations of the most daring optimists. Three upward gaps in the last five days – yesterday’s at 12,596 / 12,671 points – speak for themselves. The 13,000 point mark was also regained. In terms of the chart, however, it is much more important that the price development since the high in early September at 13,460 points can be interpreted as a trend-confirming flag (see chart). It is also helpful to have a look at the rising stock exchange turnover. Yesterday the volume was even higher than the last futures roll date in September. Investors can tick the box behind the classic “volume goes with the trend”. The next important resistance zone has its starting point at yesterday’s high (13,297 points) and extends to the above. High from September. This zone had already played a role at the end of 2019, so the hurdles are more important than the previous all-time high of 13,795 points. On the bottom there is the above. Gap investors the opportunity to apply the stop for existing commitments.


DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal

Over 3,600 points in the short term

“The pendulum is swinging upwards”, was the last headline we wrote in relation to the American standard values ​​(see “HSBC Daily Trading” of November 5th). Yesterday the S&P 500® managed to jump over the two highs of October / September at 3,550 / 3,589 points with an upward gap (3,522 to 3,547 points). Instead of a top formation, the share price development of the last few months can therefore be interpreted as a classic consolidation (see chart). At the same time, the price gap described and above all the new all-time high (3,646 points) provide additional exclamation points. In spite of yesterday’s wick, the cops are currently at the fore. The height of the previous sliding zone results in an imputed connection potential of around 350 points, which in turn leads to a price target in the range of around 3,900 points. But also from the perspective of active money management, the current price trend offers investors an important guide. Finally, tight hedging based on the most recent gap enables effective protection against a “false break” that can never be completely ruled out. Such a stop loss also ensures an attractive risk-reward ratio.


S&P 500® (Daily)

Chart S&P 500®

Source: Refinitiv, tradesignal

New record high: temporary or sustainable?

In the DAX®, the price gaps in the last 20 years have been a major source of performance. That is why we repeatedly emphasize our credo: “Gaps are important!”. From an investor’s point of view, price gaps that remain open at the end of the period should be pro-cyclical, i.e. H. can be interpreted in the direction of the outbreak. The latest price development for the BioNTech share now ensures such a price range without a listing. This begs the question of a sustained outbreak on the upper side. In this context, we constructively evaluate the ascending triangle that results from the price development over the past eight months (see chart). A jump – per day’s closing price – above the highs at 104.99 / 105.00 EUR would complete this consolidation pattern and provide a procyclical investment buy signal. The record high of 115.00 EUR, which was reached yesterday, should not mark the end of the flagpole if successful. From a risk perspective, the lower gap edge of the price gap discussed (EUR 92.20) is a good hedge. After all, a gap closing would result in a dissolution of the above. First push the triangle on the back burner.


BioNTech (Daily)

Chart BioNTech

Source: Refinitiv, tradesignal

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