Markets

DAX® – 14,000 mark in sight – columns

14,000 mark in sight

The DAX® posted a new all-time high yesterday with 13,919 points. Even on the basis of the closing price (13,892 points), the German standard values ​​achieved this feat. We emphasize the latter explicitly because the equity barometer has thus also overcome the cross resistance from the former upward trend since the end of 2018 (currently at 13,794 points) and the former record high of February 2020 (13,795 points). Since the candlestick constellation of the last three trading days also appears promising, the DAX® should be able to capitalize on the strategic price drivers – keyword: flag or V-pattern. In addition to the 14,000 mark, the 138.2% fibonacci projection of the breather between September and November represents a further milestone (14,228 points). However, yesterday’s price increases were important from another point of view: investors can slowly take a look at Throw the direction of the 5-day indicator. With a very high probability, the price development of the first five trading days serves as a reliable harbinger for the trend in the further course of the year. Therefore, a weekly closing price above the 13,719 point mark would be good news in the young year 2021.

DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal²

5-year DAX® chart

Chart DAX®

Source: Refinitiv, tradesignal²

The next course …

… of the young year! We headlined the “magic 1% mark” in our annual outlook on the pension side. In the first few meters in 2021, the 10-year US yield made the leap above this signal level. As a reminder: The high points of June and November / December between 0.95% and 0.99%, in conjunction with the 38.2% fibonacci retracement of the last yield slide from November 2019 to March 2020 (0.95%) the neck zone of a lower reversal. Thanks to the successful sprint over the mentioned barriers, the bottoming out of the last few months is considered complete. The connection potential from the height of the trend reversal can be estimated at around 45 basis points. This results in a price target in the area of ​​another accumulation zone described in the annual outlook at around 1.40%. The combination of the lows of 2012, 2016 and 2019 at 1.38% / 1.32% / 1.43% and another Fibonacci level (1.34%) ensures the next “technical chart” at this level. On the underside, the 50-day line (current at 0.89%) offers a close-knit protection against a false outbreak to the north.

10-year US return (Daily)

Chart 10-year US return

Source: Refinitiv, tradesignal²

5-year chart 10-year returns USA

Chart 10-year US return

Source: Refinitiv, tradesignal²

One of our favorite approaches …

… links the trend-following concept of relative strength (Levy) with the dissolution of technical chart consolidation patterns. This approach practically combines the best of two different worlds. While an RSL value greater than 1 ensures engagement in the direction of the overarching trend, the breakout of a consolidation formation signals that the underlying trend is picking up speed again. Exactly this constellation currently exists with the Varta share. After the RSL coefficient has consolidated a little over the past few months, at just under 1.11 it is now comfortably above the threshold value of 1. At the same time, the title broke out of the correction flag that had existed since September this week (upper limit current at 116.93 EUR; see chart). Thanks to this decision, the previous all-time high from the beginning of September at EUR 138.70 should not mark the end of the flagpole. Above the stated record level, the next start-up target at EUR 153.79 results in the form of the 138.2% fibonacci projection of the autumn correction. In order not to gamble away the tailwind described carelessly, the above will no longer apply in the future. Flag falling behind.

VARTA AG (Weekly)

Chart VARTA AG

Source: Refinitiv, tradesignal²

5-year chart VARTA AG

Chart VARTA AG

Source: Refinitiv, tradesignal²

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