Dax closes above 15,800 points – but which brands investors should be prepared for

On the downside, the area around 15,000 points should be more decisive than the 200-day line. For Martin Utschneider, technical analyst at the private bank Donner & Reuschel, “this is where the wheat is separated from the chaff”. Which probably means: If there is a significant drop below 15,000 jobs, many of the young traders who are new to the stock exchange as part of the corona rally are likely to say goodbye to the market. Because this round mark has not been undershot sustainably since April of last year. Since then there has not been a correction, i.e. a decrease of at least ten percent.

Corrections are an integral part of every stock market year. Since the turn of the millennium there have only been none in the years 2003 and 2021. Calculated from the record high of 16,290 points, a correction of 14,660 points would have been reached. 15 percent minus, as last happened in October 2020, would be a little more than 13,800 points.

These are all price fluctuations within a normal range that have nothing to do with a crash scenario. Since the financial crisis of 2008, there has been a veritable inflation of such crash scenarios, which, according to Robert Halver, capital market strategist at Baader Bank, “so far have all failed due to the omnipotence of the central banks”.

“Will not be a 180-degree monetary policy shift”

Of course, for reasons of credibility, even a Fed cannot deny the current acceleration in inflation and must react. “Even if the Federal Reserve appears to have switched to caution, investors should read between the lines. Expecting a 180-degree turnaround now in terms of interest and monetary policy is wrong,” says Halver.

If the forecast based on the evaluation of the current Handelsblatt survey Dax-Sentiment should come true, that only a panic sell-off can slow down the downward trend, then the leading index still has a long way to go on the way down.

In the opinion of Thomas Altmann from the investment house QC Partners, there is still no panic on the market, just a good deal of uncertainty. In addition to the data from the Handelsblatt survey, an indication of panic is also the increase in the volatility indices, the so-called fear barometers on the stock exchange. The higher the value, the higher the fluctuations the futures market professionals expect in the next 30 days.

With the German VDax, with a value of 20.93, only a slight uncertainty can be determined at most. For classification: Values ​​below 20 signal a calm stock market phase on the domestic market, with 99 the VDax reached its highest value during the corona crash.

Intact downward trend in the Dax

“The trend is your friend” is one of the best-known stock market proverbs. This means that investors should not go against an intact trend. Unfortunately, this friend has been a downward trend since the beginning of the year.

Since the annual high of 16,285 jobs on January 5, it has been steadily falling. Since then, both the highs of a week and the lows of a trading week have always been lower, the classic definition of such a trend.

With the slide on Wednesday to 15,630 points, the Frankfurt benchmark marked a new low. This downward trend would only end if the Dax climbed above 16,090 points again up to and including Friday, the highest price of the previous week.

Such downtrends have an advantage: they don’t last as long compared to uptrends. The disadvantage: it always goes faster down than up. It’s easier to tear something down than build it up.

Interest rate turnaround is here

The yield on the ten-year federal bond has risen above the zero percent mark for the first time. On Wednesday it was temporarily up 0.023 percent. It has thus left negative territory for the first time since May 2019. Investors could therefore get money back for their loans to the German state.

The ten-year federal bond serves as a guideline for the development of long-term capital market interest rates not only in Germany but for the entire euro zone. Bond yields in other euro countries are measured against Bunds, as are corporate bond yields. The ten-year Bunds are also a crucial benchmark for mortgage interest rates.

Yields also continued to rise in the USA. On Wednesday, the value for 10-year US Treasuries was 1.8517 percent. At the beginning of January it was only 1.511 percent. In turn, bond prices fall.

So far, the bond market has not been able to benefit from the new appeal brought about by higher interest rates. Obviously, the majority on the trading floor expects yields to continue to rise. And for that long, hardly anyone is accessing bonds.

Look at individual values

The Dax winners of the trading day included the shares that have slipped significantly in recent weeks. The shares of the online fashion retailer Zalando, the recipe box mailer Hellofresh and the laboratory supplier Sartorius led the list of winners, each with a plus of around two percent. Bargain hunters were probably active here. Because these three values ​​had fallen significantly in the past four weeks, the Sartorius share showed a minus of more than 22 percent for this period.

Siltronic: The analysis firm Jefferies had increased the price target from 150 to 160 euros and issued a buy recommendation. The background was that the takeover by Globalwafers was becoming increasingly unlikely and the associated price correction now offered a buying opportunity. The stock was down 1.8 percent at the close of trading.

Commerzbank: The MDax share rose by 1.8 percent after a buy recommendation from Deutsche Bank. Analyst Benjamin Goy praised the competitor’s improving profitability. At the end of trading, the stock was up 0.5 percent.

Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.