Dusseldorf After the new annual high with subsequent profit-taking, the German stock market is taking a breather. The leading index Dax was unchanged on Thursday morning at 15,693 points.
Yesterday’s trading day showed a trend: new highs for the year are no longer signals for follow-up purchases – which is actually normal – but an invitation to take profits. This was not only the case yesterday, Wednesday, when the Dax set its new high for the year at 15,827 points. But also on April 4, when the Dax suddenly fell 250 points the following day after rising to the high for the year at that time of 15,737 points.
There is a high probability that this scenario will repeat itself and that the leading German index will continue to fall in the short term. Because with the profit-taking on Wednesday, the technical starting position has deteriorated.
If the technical analysts are correct, it should still be more of a brief interlude before things start moving up again. Because on Wednesday there was another positive signal: With 15,703 points at the end of trading, the Dax also made a new high for the year at the daily closing price.
According to Martin Utschneider from the private bank Donner & Reuschel, “profit-taking should be moderate”. And for Jörg Scherer from HSBC Germany, after “a possible consolidation, the 16,000 mark is on the bulls’ agenda before they can set their sights on the all-time high”. Bulls are used to describe investors with a positive attitude.
The record mark is 16,290 points. And Scherer is certain: “The resistance at 16,285 and 16,290 points, respectively, the highest levels of 2022 and 2021, is robust!”
When looking at the possible supports, the area between 15,300 and 15,400 is particularly striking. There, with 15,353 points, is the 38-day line, which shows the short-term trend. A slide below 15,300 could trigger a test of the 15,000 zone. Below that is the low point of the past two weeks at 14,809 points.
It is quite possible, however, that the Dax will not fall that low. There is already a first support area at around 15,600 to 15,650 points.
Professional investors have lost patience
However, the current survey by the Frankfurt Stock Exchange among investors with a medium-term perspective also shows that the way up is likely to be difficult, at least in the coming trading days. Profit-taking is likely to occur at the latest at prices just above 16,000 points.
The reason: Many investment professionals have lost patience in the past few days. Just a week ago, the majority of the institutional investors surveyed were pessimistic, now they are optimistic again.
The bear camp has shrunk significantly, with 75 percent of ex-pessimists moving straight into the bull camp. You are now betting on rising prices again. According to sentiment analysis, optimism among investors tends to be considered a burden on further price development because, to put it simply, there are fewer buyers.
Behavioral economist Joachim Goldberg, who evaluates the survey, expects the new bulls among the professionals to be satisfied with small profits given the many negative headlines surrounding growth concerns and tensions between China and Taiwan. Courses around the 16,000 mark should be a sell signal for them.
On the downside, the previous support level of 15,330 to 15,380 points, where the former pessimists wanted to buy again, has weakened due to the new buyers. Goldberg believes the swing in sentiment is a mild drag, but not a critical one.
Look at the individual values
BASF: The Ludwigshafen-based chemical giant posted a sharp decline in its operating profit (EBIT) in the first quarter. However, the slump in operating earnings was less severe than feared by most analysts. The figures were released on Wednesday afternoon. After an increase of 0.8 percent on the previous day, the share continued to rise on Thursday and is listed up one percent.
Economy: The electronics retail chains Media Markt and Saturn increased sales in the past quarter. The parent company Ceconomy reported on Wednesday that the chains had “recorded good customer demand” from January to the end of March. The stock rose 0.7 percent on Thursday.
Retail trade: A jump in sales at the French luxury goods group LVMH brightened the mood in the consumer sector. LVMH shares jump to record highs after surprisingly strong sales gains in the quarter, dragging the entire sector higher. The titles of the luxury group with well-known brands such as Louis Vuitton, Dior and Hennessy skyrocket in Paris by 3.8 percent to 868.50 euros.
In the wake of LVMH, shares in Burberry, Hermes, Richemont, Moncler, Kering and Ferragamo gained between two and four percent. Zalando titles are up 1.7 percent, Adidas and Puma each up 1.9 percent.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.