Markets

DAX® – (Too) good mood as a drag – columns

(Too) good mood as a stumbling block

“You also have to make up your mind to hesitate.” This quote from Stanislaw Jerzy Lec describes the current DAX® development absolutely aptly. The German standard values ​​started the expected rally attempt on the upside yesterday, but ultimately the share barometer remains within the resistance zone at 13,300 / 13,460 points. The distinctive wick of yesterday’s candle even signals the respect of market participants for the hurdles listed. In order to breathe a new upward dynamic into the DAX®, a sprint over the aforementioned resistance zone is therefore still necessary. On the other hand, closing yesterday’s upward gap (13,328 to 13,297 points) would mean a short-term failure at the above. Speak key zone. The exuberant mood on the stock market is currently making a breakout on the upside difficult. We recently pointed out the historically low put / call ratios and the overheated CNN Fear & Greed Index at this point. This fits the sentiment survey published this morning by the American Association of Individual Investors. The proportion of “bullish” US private investors remains at 48% – a very high figure. The current hesitation could therefore continue for the DAX®.

DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal²

5-year DAX® chart

Chart DAX®

Source: Refinitiv, tradesignal²

Attention: You should know this signal level!

Adobe stock has been in consolidation mode since the previous record high of $ 536.88 in early September. In terms of chart technology, this development is reflected in a classic correction flag (see chart). Overall, the gathering of strength in the last few months has a constructive character, not least because the Relative Strength according to Levy (so far) remains above its threshold value of 1 despite a breather. It is currently interesting that there is also a flag in the course of the trend-following indicator – with the difference that the pattern has already been resolved upwards. In the past, such indicator formations regularly served as harbingers of an equivalent course in the actual chart. We therefore define a jump over the upper flag limit (currently at USD 497.42) as a signal transmitter on the upper side. In the event of success, one of our favorite approaches would also be fulfilled, which combines the concept of relative strength with completed, technical chart consolidation formations. A completed flag gives hope for new record highs above the USD 537 mark. The July high at USD 471 is a good stop.

Adobe Systems (Weekly)

Chart Adobe Systems

Source: Refinitiv, tradesignal²

5-year Adobe Systems chart

Chart Adobe Systems

Source: Refinitiv, tradesignal²

Course turbo thanks to nested course pattern?

The Activision Blizzard share has recently been able to use its 38-week line (currently at USD 75.73) as a springboard. The spurt above the correction trend that has existed since August (currently at USD 79.63) is now simultaneously causing the “bullish” dissolution of a classic correction flag (see chart). On the one hand, the conclusion of this trend-confirming price pattern signals that the base upward trend of recent years is picking up speed again. On the other hand, the flag gives hope for new record levels beyond the highs of October 2018 and August 2020 at USD 84.68 / 87.73. The latter would be the much more important setting of the course, because if successful, the price development of the last four years could be interpreted as an upward displacement zone. So there is currently a nested price pattern: The price potential from a constructive chart formation is sufficiently large to take the next positive course. Figuratively speaking, one technical chart wheel may now interlock with the other. In order not to frivolously gamble away this steep template, it will no longer apply in the future to the above. Flag falling behind.

Activision Blizzard (Weekly)

Chart Activision Blizzard

Source: Refinitiv, tradesignal²

Activision Blizzard 5-year chart

Chart Activision Blizzard

Source: Refinitiv, tradesignal²

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