The DAX start of the week could begin with a slight consolidation, as the last highs are close together. What do I watch out for on Monday morning?
What follows on the new records in the DAX?
There were several records in the previous week. Almost daily at the closing price and then twice more intraday. First on Tuesday with 15,685 points and after the almost “usual” consolidation then again on Friday at 15,705 points.
In the meantime, the US labor market acted as a brake on the market and ultimately it was the driving force on Friday. The fear of interest rate hikes by the US Federal Reserve (Fed) subsided significantly at the end of the week. In May, only 559,000 new jobs outside of agriculture were created in the US, which was below the expectations of 650,000 jobs. Here you have to “think outside the box”. Positive economic data is good for the economy, but data that is too positive is not. The market got exactly the right mix for a relaxed end of the week.
Ultimately, the DAX was able to rise every day in June and, as mentioned at the beginning, also surpass the first record high of the week at almost the last minute of XETRA trading:
New record high in the DAX
Volatility and trading volume fell significantly over the past week. That was due to the holidays. A quick look at June so far:
June trading days in the DAX
And in detail on Friday with all daily parameters:
|Previous day course||15,632.67|
What remained was an upward trend and a GAP on “Memorial Day” – the last trading day in May:
Last GAP in the DAX
How do we start Monday?
In the medium term, the German share index can be certified as a successful continuation of the recent upward trend. As a trend channel in the hourly chart, this is visually very nicely illustrated by higher highs and higher lows:
Medium-term trend channel in the DAX
The market has space in the XETRA chart images up to a trend line, so I am assuming a consolidation. From the preliminary exchange, this has already started easily:
DAX pre-market on June 7th, 2021
In my opinion, it would “pick up speed” a little more if we opened at 9:00 am, directly below the Tuesday record, and quickly ran to 15,640. This could break the trend line in the endless contract:
DAX endless contract before signal
Not only this trend line is important, but the whole area below 15,640 points. There was a consolidation level here, which is anchored in the XETRA chart as current support. If this area breaks, the next catchment area (and goal of the short trades) would then be to focus on Wednesday’s support:
Zones for consolidation in the DAX
Should both zones not hold, the GAP on “Memorial Day” will be exciting again, which was outlined in the chart at the beginning. In the interests of a sustained upward trend, the consolidation should be completed there at the latest. This is the only way to keep the summer sunny for investors. The overriding principle is “The trend is your friend” and, in the case of ideas for investing, also the search for individual shares, which I developed and discussed in the community, for example (NEW: Registration for this section as a newsletter).
A more detailed DAX picture will surely result tomorrow from the preliminary exchange. I will update this accordingly in the DAX outlook by email to you. After that, I am in the daily stream on Twitch together with other traders to see and open to your questions:
Pay attention to the following dates at the start of the week.
Economic data on June 7th, 2021
According to the first data from Japan, work orders from Germany await us today at 8 a.m., wholesale prices from Austria and industrial production from Spain at 9 a.m.
Around 10.30 a.m. the Sentix investor confidence at EU level is exciting. Then, from an economic point of view, the publications decrease significantly.
All dates mentioned are listed here in a table with the forecasts of the analysts:
Economic data on June 7th, 2021
I wish us all the best for the start of trading on the German stock market today.
Also available as a YouTube video:
Your Andreas Bernstein
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