Markets

DAX® – Take a deep breath – columns

Take a deep breath

At the beginning of the week there was slight profit-taking on the DAX®. As a consequence of this development, the all-time high reached on Friday (14,132 points) must be interpreted as a so-called “swing high”. This chart constellation often marks short-term market turning points. But we don’t want to sound too negative at this point, because the start of the week also contains a positive message. In this context, we remind you of the holding zone from the former upward trend since December 2018 (currently at 13,819 points) and the former record high from February last year at 13,795 points. With yesterday’s daily low (13,807 points), the described cross support was confirmed with pinpoint accuracy. The loosening of the described daily low also creates a striking fuse. Therefore, only a rebreak of this bastion would provide a serious warning shot. From a strategic point of view, we continue to emphasize the key role of the horizontal breakout marks at 13,500 points. Only in the event of a rebreak of this level would investors have to deal with the topic of “false break” on the upside.

DAX® (Daily)

Chart DAX®

Source: Refinitiv, tradesignal²

5-year DAX® chart

Chart DAX®

Source: Refinitiv, tradesignal²

Warning: an absolute key chart!

Since the summer, the Shanghai Composite has been hovering sideways between around 3,180 points and 3,460 points. The latest price advances at the turn of the year now ensure a “bullish” break out of the sliding zone described. In purely mathematical terms, the resolution of the trading range described has a connection potential of almost 300 points. At this point it gets exciting, because there is currently a nested course pattern. Finally, the discussed connection potential suggests a spurt above the multi-year high of the beginning of 2018 at 3,587 points. This chart-technical liberation would finally complete the multi-year bottoming of the last few years (see chart), which in turn would activate a much greater price potential. If successful, this can be estimated at around 1,100 points. If the outbreak succeeds, the high points at 3,685 and 4,184 points respectively define important milestones. On balance, the Shanghai Composite may find itself in a situation in which one technical chart engages the other. The 2019 high of 3,288 points is predestined as a hedge on the underside.

Shanghai Composite (Weekly)

Chart Shanghai Composite

Source: Refinitiv, tradesignal²

5-year Shanghai Composite chart

Chart Shanghai Composite

Source: Refinitiv, tradesignal²

Island reversal gives courage

After tripling in price, Curevac shares began a sharp correction on December 9th. The most recent upward gap on December 7th (USD 90.00 to USD 96.12) is now raising hopes of a trend reversal. Ultimately, this gap, together with the downward pendant from the end of December, forms a possible “island reversal” (see chart). Two aspects underpin the equally rare and reliable reversal: On the one hand, the 50% correction of the rally from September to December (97.40 USD) could be regained; on the other hand, the stock is again above the smoothing line of the last 38 days (current at $ 99.23). The horizontal retreat line from the highs of mid-August and mid-November at USD 85.00 / 85.68 could therefore actually prove to be a stepping stone. Above the most recent high (USD 109.17) the way would be free towards the previous record level (USD 151.80). The main charm of the current technical chart constellation is that the above. “Island reversal” also enables tight protection on the underside. It is imperative to prevent the most recent upward gap (lower gap edge at USD 90.00) from closing.

CureVac (Daily)

Chart CureVac

Source: Refinitiv, tradesignal²

5-year chart CureVac

Chart CureVac

Source: Refinitiv, tradesignal²

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