Dusseldorf The leading German index has already sustainably overcome the downward trend since the beginning of the year. And today, Tuesday, the focus was 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.
With a closing level of 13,688 points, plus 1.2 percent, the Dax was able to clearly over-trade this line. According to the technical analysis, an opening price above this line is still required tomorrow, Wednesday, then it would be permanently overcome.
For the capital market expert Thomas Altmann from the investment house QC Partners, a sustainable crossing of this average line should 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. According to chart technology, the next price target for the leading German index would now be the high of August at 13,948 points.
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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 midterms determine 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 increased by 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.
On Thursday, the stock market will face another test with the inflation data at the latest. 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 was up 1.2 percent at the end.
Handle: The consumer goods maker is growing, largely because it pushed through price hikes. Therefore, the Dax group is now expecting more profit. The stock rose 0.85 percent.
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 loses 4.75 percent and is at the end of the Dax.
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. 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 gained 2.7 percent.
German mortgage bank: The paper is a downgrade under pressure. The shares of the institute, which specializes in real estate financing, fell by 8.5 percent in the meantime, making them the biggest losers in the SDax. Most recently, the minus was 3.8 percent. Analysts at Deutsche Bank downgraded the stock to “hold” from a previous “buy” and lowered the price target to seven from the previous €13.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.