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DAX® – 14,000 points: The strategic price drivers – columns

14,000 points: The strategic course drivers

The DAX® achieved a new all-time high yesterday as well. For the first time in history, the 14,000 point mark fell. Based on the weekly chart, we would like to highlight the currently available strategic price drivers again. First of all, a new record is synonymous with one of the best signals in technical analysis. In addition, the flag consolidation from September to November and the “V-shaped” pattern of last year provide the stock bulls with important arguments (see chart). The next milestone is now the 138.2% fibonacci projection of the breather from September to November (14,228 points). The stated flag consolidation even gives hope for a run-up to the 15,000 point mark. But the current outbreak situation also offers investors important assistance from a risk perspective. In order to avoid the risk of an erroneous breakout on the upper side, it is important in future not to fall permanently below the key zone at 13,500 points. In other words, the new highs give investors the opportunity to adjust their stop loss.

DAX® (Weekly)

Chart DAX®

Source: Refinitiv, tradesignal²

5-year DAX® chart

Chart DAX®

Source: Refinitiv, tradesignal²

The “2 T’s”: Trend break + trend reversal

In the past 13 years there was absolutely no state to be made with ThyssenKrupp shares. This statement is probably still too weak, because in the course of last year the paper even had to accept a new all-time low of EUR 3.28 in March. Nevertheless, the title is in an exciting technical chart position at the beginning of 2021. First of all, the further development of the share price over the past 12 months will contribute to this. The already mentioned record low was followed by a second cyclical low (EUR 3.82) in October. Thanks to the spurt above the June high at EUR 7.94, these two lows define a classic double bottom (see chart). In the first trading days of the new year, the share was also able to put the steep bearish trend since September 2018 (current at EUR 9.76) on record, which provides an additional exclamation mark behind the lower reversal described. The half-year chart also provides an important indication of a sustainable change for the better. At this high time level, the distinctive fuses of the last two 6-month candles stand out (see continuation below).

thyssenkrupp (Monthly)

Thyssenkrupp chart

Source: Refinitiv, tradesignal²

5-year thyssenkrupp chart

Thyssenkrupp chart

Source: Refinitiv, tradesignal²

Target price EUR 12?

Thanks to the trend reversal described, we consider a price quotation in the double-digit range in the next few months to be realistic. The calculated connection potential from the above The double floor can even be estimated at around EUR 4, which leads to a price target in the region of EUR 12 in the future. Interestingly, this target harmonizes very well with the lows of 2008/09, 2012 and 2016 as well as with the 38.2% fibonacci correction of the last bear market from summer 2017 to March 2020 (EUR 12.34). With a view to the current indicator situation, we would like to point out a special constellation. The relative strength reached historic lows in the course of 2020. The major market turning points of the last two decades come with an RS coefficient in the range of 0.5. If the MACD then also generated a buy signal, the cyclical low was actually behind investors. This is exactly the situation that currently exists (see chart). The downtrend break in the course of the relative strength is the icing on the cake. A stop-loss based on the neckline of the bottom (EUR 7.94) also ensures an attractive risk-reward ratio.

thyssenkrupp (Monthly)

Thyssenkrupp chart

Source: Refinitiv, tradesignal²

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