Dusseldorf The leading German index has already sustainably overcome the downward trend since the beginning of the year, and the focus is now on the important 200-day moving average. This average line is trading at around 13,620 points on Tuesday and is probably the most important indicator for the transition from a bear market rally to a sustainable trend reversal.
For the capital market expert Thomas Altmann from the investment house QC Partners, a sustainable crossing of this average line could improve the mood on the floor significantly. Because this line is not only considered by long-term investors.
“Many technical trading models base their investment decisions on the 200-day moving average. These models could then trigger further purchases that carry the Dax further up,” explains Altmann. With yesterday’s daily high, the Dax was only 15 points away from the line. At least one daily closing price and the opening price on the following day must be above this line for a sustainable overshoot.
On today’s trading day it is currently a good 50 points away from this line. The leading German index was trading at 13,573 points in the morning, up 0.3 percent. What speaks for further rising prices: The Dax has left its downward trend since the beginning of the year with a high trading volume, which also confirms the price increase.
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The European selection index Euro Stoxx 50 has already managed to overcome this line. Should the leading German index also overcome this hurdle in the coming trading days, the high of August at 13,948 points would be the next point of contact according to chart technology.
But the current chart trend also provides investors with important guidance on the underside. According to Jörg Scherer, technical analyst at HSBC Germany, the early November low of 13,023 marks an important support that can be used as a level of protection. A slide below this mark would also mean a relapse into the downward trend since the beginning of the year.
Today is election day in the United States. The Mid-Terms decide how capable US President Joe Biden will be during the second half of his presidency – and who might run for president two years from now.
The outcome of the election itself is likely to have little impact on stock market prices. And yet the election could ensure a continuation of the autumn rally, which has already shown an increase of 14 percent or the equivalent of more than 1700 points since the end of September.
What initially sounds like a contradiction has the following background: the election result is unlikely to change much politically. So far, Biden has not been able to “go through”. In the past, different majorities in the House and Senate have typically signaled a more restrictive fiscal policy. Especially since the fiscal room for maneuver is limited, also in view of the high inflation. And on important issues like budget policy, the differences between Democrats and Republicans are currently rather small.
And why could the election ensure further rising prices? Before such appointments, many investors hold back with their purchase decisions. Because there are other risks, regardless of the outcome, such as riots or legal disputes before the final result is known. It is quite possible that the 200-day moving average will be surpassed by the daily closing price on Thursday of this week at the latest.
Because on Thursday, at the latest with the inflation data, the stock market faces a new test. With the European Central Bank and the Federal Reserve, the two major central banks have signaled that their rate hike course will no longer be 75 basis points per meeting, but only 50 basis points. But only if there is inflation data. The worst thing for the stock market would therefore be another jump in the inflation rate.
Look at the individual values
German postal service: The Bonn-based Dax group is raising its profit forecast for 2022. However, analysts had expected more. That’s why the papers lose one percent.
In the Corona year 2021, a booming online business in Germany had driven the result up sharply. According to statements by Post boss Appel, things are now normalizing – at least at a high level. The stock
Handle: The consumer goods manufacturer is growing primarily because it pushed through price increases. Therefore, the Dax group is now expecting more profit. Nevertheless, the share loses 0.7 percent in value.
Bayer: Thanks to a strong agricultural business, Bayer beat expectations in the third quarter and is on course for record profit for 2022. The controversial weed killer glyphosate was once again responsible for this boost. The price of the pesticide had already tripled in the first half of the year. However, the share lost 2.3 percent.
Munic Re: Despite the natural catastrophe losses, the reinsurer confirms its profit target and increases its premium income forecast. One support is the primary insurer Ergo. The Munic Re share increases by 1.7 percent.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.