Markets

DAX® – one step forward, one step back

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HSBC Daily Trading

One step forward, one step back

The DAX® continues to digest the price jump from the Monday of the previous week in the form of a real firework of candles of the day with small candle bodies and overall below-average fluctuation ranges. Yesterday’s trading day is no exception in this context, because yesterday, too, there were just over 100 points between the daily high and low. Our short-term assessment thus remains the same as last. Also at the risk of repeating ourselves: On the underside, a slide below last Friday’s low (13,005 points) gives the starting signal for a temporary breather at the upper limit of the most recent consolidation flag (currently at 12,713 points). To the north, on the other hand, the high of November 9 (13,297 points) marks the beginning of the striking resistance zone, which extends to the high of early September at 13,460 points. A jump over these barriers ends the series of “inside candles” and should spark new upward momentum. From a seasonal point of view, the tailwind of the approaching “Thanksgiving week” may be helping “the market” (see analysis below).

DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal²

5-year DAX® chart

Chart DAX®

Source: Refinitiv, tradesignal²

Thanksgiving tailwind?

Seasonal phenomena – such as B. the Christmas rally – have been intensively researched in recent years and made known to a wide range of investors. Investors are less familiar (presumably) with the “Thanksgiving rally” anomaly. In the week of the US Thanksgiving Day on Thursday, the stock market prices rise regularly. In order to substantiate this thesis, we used the course data since 1945 for the S&P 500®. Since the end of World War II, the US standard values ​​have increased by an average of 0.63% in the Thanksgiving week. The good performance is only one side of the coin: We consider the hit rate of 70% to be almost even more important. We would also like to highlight the performance in the context of the holiday – specifically from the opening on Wednesday to the closing price on so-called “Black Friday”. The “bracket” around Thanksgiving produces an average return of 0.39% and the probability of rising prices increases to 77%. As an explanation for this seasonal anomaly, u. a. psychological aspects – in other words, the “good (investor) mood” in the run-up to public holidays. Given the outbreaks at hand, the seasonal Thanksgiving tailwind could fall on fertile ground in 2020 despite the special circumstances.

S&P 500® (Daily)

Chart S&P 500®

Source: Refinitiv, tradesignal²

S&P 500® 5-year chart

Chart S&P 500®

Source: Refinitiv, tradesignal²

Gap in focus

Course gaps play a major role and are often a major source of performance. Depending on their characteristics, they regularly function as resistance or support. This statement is particularly true of the SAP share, because the size of the latest downward gap (EUR 122.60 to EUR 105.40) is unparalleled. The unlisted area also plays a key role in the further price development: Together with the 23.6% fibonacci retracement of the entire price decline since the beginning of September (EUR 102.53), the low of October 2019 at EUR 103.06, the 200-week line (current at EUR 103.56) and the lower gap edge creates a textbook-like accumulation zone at this level. In order to give the share a sustainable recovery perspective, a jump over the listed hurdles is the absolutely essential starting condition. Until then, discount certificates offer the chance of attractive sideways returns – for the SAP share, which has otherwise been very trendy in recent years. In addition to the recent low at EUR 89.93, investors should consider the upward trend since 2014 (currently at EUR 87.33) and the March low at EUR 82.13 as possible supports when selecting products.

SAP (Weekly)

Chart SAP

Source: Refinitiv, tradesignal²

5-year SAP chart

Chart SAP

Source: Refinitiv, tradesignal²

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