Dax remains in the plus – first hopes of bottoming out

Accordingly, yesterday’s huge trading range of over 700 points offers orientation for the coming trading days. On the bottom is yesterday’s low of 12,438 points. Any break below would be a sign of weakness and could trigger another sell-off. On the upside is yesterday’s daily high at 13,150 points. Even a short-term rise above this mark would be a surprise and would make some short sellers who have bet on falling Dax prices ponder.

Looking back at major bottom formations in the past, such a process takes a few trading days. During the corona crash in mid-March 2020, the absolute low point was 8255 points on March 16th. With high fluctuations, this low was tested for five more trading days, but without being fallen below. The trend reversal did not follow until March 24, 2020, with prices above 9000 points being sustainable again. At that time, the leading index ended the trading day with 9700 points.

The last major correction before the Ukraine war, which took place at the end of October/beginning of November 2020, ended similarly. Shortly before the US presidential election and the announcement of the first corona vaccine, the leading index slipped to 11,457 points. This brand was the measure of all things for three trading days. On the third day, the index even fell further, with suddenly 11,450 points, further price losses were even likely. But it was the start of an unabated rally until the end of 2021.

Both bottom formations and the current situation in the Ukraine war have one important thing in common: In all three cases there was or is a sell-off among investors. The indicators of the Handelsblatt survey Dax-Sentiment are currently at an extremely negative level, which as counter-indicators signal an impending bottoming out. The five-week sentiment has already fallen below the value at the end of October 2020, but is still above the values ​​​​during the corona crash.

Sentiment expert Stephan Heibel shows a positive perspective. “Just a calming down of the situation in Ukraine or at least a few days without further deterioration would be enough to end the panic selling,” he said. “An end to the panic selling would immediately lead to a countermovement on the stock markets.”

For the technical analysts at HSBC Germany, too, the current market phase is not only dominated by psychology, but “the Dax may now be in an exaggeration phase”. This is signaled by various technical indicators. But even according to the assessment of the HSBC analysts, there is currently no countermovement in sight. “Rather, it is initially about finding a new market balance,” says Jörg Scherer from HSBC Germany.

Oil price rises again, but does not reach a new multi-year high

According to a Bloomberg reporter, the US wants to ban the import of Russian oil. An announcement could still be made on Tuesday, the agency’s reporter tweeted. This causes oil prices to rise significantly again. A barrel (159 liters) of North Sea Brent costs $128.75, an increase of 4.5 percent. The US variety WTU rose around four percent to $ 124.20. However, both varieties no longer reach their multi-year high from the previous day.

On Monday, Brent oil hit a 13-and-a-half-year high of $139.13 a barrel and then went on a rollercoaster ride. WTI meanwhile cost 130.50 dollars on Monday yesterday. “If the war doesn’t stop, Brent prices could go up to $156-$185 a barrel,” says commodity expert Ajay Kedia of Kedia Commodities.

Metal prices fall again

After an initial price explosion on the metal exchanges on Tuesday, prices are falling again. The price of palladium has turned negative after being up 7.5 percent. Aluminum, which is needed in aircraft and automobile construction, initially increased by more than four percent to $3,900 a ton. A ton is now trading at $3,740 again, down 2.8 percent.

London Metal Exchange suspends trading in nickel

After a massive price increase, the London Metal Exchange LME suspended trading in nickel “at least for the rest of the day” on Tuesday. Previously, the price of nickel had temporarily reached a new record high of 101,365 dollars per ton (93,038 euros).

The background to the price increase is primarily feared delivery bottlenecks as a result of the Russian war of aggression in Ukraine and the sanctions imposed as a result. Russia is one of the world’s largest nickel exporters. Nickel is particularly important for the refinement of steel products, but the element also plays a role in the manufacture of batteries for electric cars, for example.

The surge in wheat prices seems to be coming to an end, at least for the time being. On Tuesday, for the first time in six days, the May contract did not rise by the maximum possible amount at which trading was halted (“limit-up rule”). A new record high of 1363 US cents per bushel was recorded right at the opening, but the price then fell back to 1200 US cents. He is currently trading around two percent up at 1320 US cents.

The Russian agricultural consultancy Sovecon has reduced its forecast for Russia’s wheat exports in the current crop year 2021/22 by 800,000 to 33.5 million tons.

Because of Russia’s war against Ukraine, more and more investors are seeking refuge in the “safe haven” of gold. The precious metal gained up to 1.1 percent and, at $2,020.80 per troy ounce, is as expensive as it was last in August 2020. The price is currently back at $2,010.

Are hedge funds buying back global fashion stocks?

As on the previous day, papers from the renewable energy sector were far ahead in the small-cap index SDax: SMA Solar, Encavis and Verbio, which was still weak on Monday, gained between five and a half and over nine percent, Nordex gained almost seven percent.

SDax leader was the online fashion retailer Global Fashion Group, which posted a brilliant recovery rally with a price increase of more than 22 percent to almost two euros and at least more than ironed out the previous day’s loss. Since the record high in early 2021, the losses still add up to almost 90 percent. Despite an increase in sales, the company slipped deeper into the red last year and does not have any concrete prospects for 2022 due to the war in Ukraine.

This rally may also have been a signal for hedge funds to take profits. Because recently three hedge funds speculated on falling prices at the online fashion retailer. Your so-called short sale rate was recently around two percent of freely tradable shares.

These hedge funds, also known as short sellers, bet on falling prices with “short sales”. To do this, they borrow shares for a fee and sell them in the hope of being able to buy them back at a lower price before the return date. The difference is the profit. If the stock rises unexpectedly, the hedge funds make a loss.

Look at the individual values

Schaeffler: The automotive and industrial supplier is not making a forecast because of the war in Ukraine. The company announced on Tuesday that it was currently not possible to make a well-founded forecast for the 2022 financial year. Schaeffler will closely monitor further developments and the direct and indirect effects and provide an outlook as soon as possible. However, the share rose by 7.3 percent.

Unipers: In view of the Russian invasion of Ukraine, the Düsseldorf-based energy group Uniper is making a U-turn in its Russian business. Uniper will not make any new investments in Russia. No funds would be transferred to the Russian power plant subsidiary Unipro for the time being. The process to sell Unipro, which was initiated at the end of last year, will be stopped for the time being and will be resumed as soon as possible. In addition, Uniper will write down its loans to Nord Stream 2 AG in the amount of EUR 987 million. The share rose by 6.8 percent.

BASF: The stock rose by 2.7 percent. Deutsche Bank has downgraded the BASF paper from “buy” to “hold” and lowered the price target from 90 to 64 euros. Even if the shares of the chemical company are very valuable, the headwind is increasing and at the same time there are no price drivers for the next twelve months.

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