Dusseldorf The German stock market is down for the second day in a row. The Dax closes 0.2 percent down at 15,321 points.
Yesterday’s trading day, down 0.8 percent and closing at 15,345 points, was more of a healthy breather than an indicator of a southbound trend reversal. Because the trading volume fell significantly compared to the previous days and has more than halved compared to Thursday at around 54 million pieces. On that day, the Dax rose by more than two percent and reached a new high for the year at 15,520 points.
With high trading volume confirming a trend, yesterday’s low trading volume suggests a wait-and-see attitude. Many investors currently have the assumption that it might be too late to get started.
After all, the Dax has risen by more than 3650 points since the end of September and has gained around ten percent in this still young stock market year alone. With the high for the year in the form of 15,520 points, it was an increase of 11.5 percent.
First short positions were closed
And those who are invested are apparently afraid to sell too early or at least don’t expect a major setback that offers the chance for a cheap entry. At least some investors used the interim price drop of a little more than one percent on Monday to close their short positions on the Dax.
Because the Euwax sentiment of the Stuttgart Stock Exchange has risen again from the lowest level since the Corona crash, but is still at a very low level of minus 15. The more investors close their short positions, the lower the chance of a short squeeze, a brilliant price increase without fundamental news.
Because when buying a short derivative on the Dax, the Dax is first sold. And when the derivative is sold, the Dax must be bought back again. So strong hedges create a kind of safety net that cushions a price drop to a certain extent. Depending on the size of the open short positions, the next few trading days should decide: Will this network remain on the underside and is there still a chance of a short squeeze if prices continue to rise?
Short-term support has established itself
On the downside, a short-term support has emerged. It is the upward price gap in the range between 15,222 and 15,264 points that the Dax opened up last Thursday. Such a gap occurs when the previous day’s high is below the following day’s low and is then considered a support level.
Yesterday, Monday, the daily low of 15,275 points was just above this gap. Apparently that was an entry signal for some investors. This game was repeated on Tuesday with the previous day’s low of 15,273 points. In addition, the high from the past month of 15,270 points is just around the corner.
As long as this gap remains open, i.e. the Dax does not fall to 15,222 points, the upward trend since last Thursday is intact and a new high for the year is therefore likely.
Powell speech in focus
In view of interest rate concerns that have flared up again, investors are focusing on a speech by the head of the US Federal Reserve, Jerome Powell. Stockbrokers are hoping for more information on the Fed’s monetary policy course from his appearance at the Economic Club of Washington. However, the speech only begins after the stock exchange closes in Germany.
After the strong jobs report on Friday, market expectations for key interest rates in the US have been adjusted slightly upwards. However, the market still believes that the Fed will lower interest rates later in the year.
Powell’s speech is unlikely to change that much. Rather, investors should pay attention to new economic signals. However, there are no front-line data releases scheduled for this week. It should then be exciting again next week when the data on consumer price inflation from the USA are announced.
Look at the individual values
synlab: The shares of Europe’s largest laboratory chain, Synlab, are in free fall, falling by 25 percent at their peak. Investors fled in the face of the bleak prospects after the boom driven by the corona pandemic. At the close of trading, the shares were down 18.5 percent.
Team viewer: The strong growth at the end of the year made investors optimistic for the current year. With an increase of 17.7 percent, the value left the other MDax titles far behind. In addition to the “solid forecast”, the second share buyback program announced on Monday evening is also driving the shares of the specialist for remote maintenance software, said a trader.
SiemensEnergy: The energy technology group wants to be back in the black by 2025 at the latest. The prospects for 2024 would still be reviewed. In the current year, the group expects a net loss at the level of the previous year of minus 647 million euros due to the problems at the Spanish wind turbine subsidiary Gamesa. With a loss of 2.3 percent, the share is one of the biggest losers in the Dax 40.
Above all, shareholders were angry about a planned capital measure of up to 1.5 billion euros. The background is the acquisition of all shares in the Spanish wind turbine subsidiary Siemens Gamesa, whose losses brought Siemens Energy a net loss of more than half a billion euros in the first quarter.
Sixt: According to traders, an upgrade provides a tailwind. The car rental company’s shares rose 1.5 percent. The background is the upgrade of the shares to “Outperform” from previously “Underperform” by the broker Exane.
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