However, the first reports from Tuesday evening about the rocket fire had caused the Dax to slip by around 250 points to 14,125 points after the trading day. The index was then able to recover quickly. The nervous reaction of the leading index reminded some investors of the political and economic risks that the war still entails.
For Martin Utschneider from the private bank Donner & Reuschel, the reaction to the rocket fire and the subsequent movement of the Dax showed how nervous the market is at the moment. Hedges and stops therefore remain highly relevant in the near term. The 200-day line currently at 13,586 points offers strategic investors a good support line.
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The relief that it was probably not a targeted Russian attack on NATO country Poland does not automatically mean that the stock markets will immediately continue to storm upwards. Because the past two trading days have shown the Dax clear limits. With prices above 14,400 points, the air is getting thinner for the Frankfurt benchmark.
On both days, attempts at a breakout above 14,400 quickly ended. Yesterday, Tuesday, it ended at 14,440 points, the day before at 14,431 points. The upward momentum also slowed on these trading days because the opening price was close to the closing price.
Conversely, this also means that if the leading index sustainably overcomes Tuesday’s high movement, prices should quickly rise to around 14,700 points. There is the next point of contact for the upward movement since the end of September.
However, the most likely scenario for the German stock market remains one of consolidation. After all, the Dax has already climbed over 2500 points since the end of September, an increase of more than 20 percent.
“A Breather”
Initial short-term support stands at 14,157, the lower limit of an upside gap opened last Friday. The gap arose because Thursday’s highest price of 14,157 points was below Friday’s lowest price of 14,172 points.
Such gaps are like a re-evaluation of the market because there has been no regular trading in this range. For Jörg Scherer, technical analyst at HSBC Germany, “closing this gap should result in a breather”.
Short-term oriented investors can hedge positions on this basis accordingly. If the gap closes, the next port of call is 13,947 points, the high of August.
New insolvency on the crypto market is imminent
The mood on the crypto market remained tense. According to a report by the Wall Street Journal, the collapse of the cryptocurrency exchange FTX is taking the crypto bank BlockFi into the abyss, which is preparing to file for bankruptcy.
“Should another major address collapse in the coming days, this would be an additional blow to the office,” said analyst Timo Emden from Emden Research. “As long as the chain of bad news doesn’t break, investors should be prepared for further price losses.” Bitcoin and Ethereum were down more than two and three percent on Wednesday. Both cyber currencies had recorded massive price losses in the past few days.
Look at the individual values
Siemens Energy: The Dax group continues to write deep red numbers. In the 2021/22 financial year, the net loss increased from 560 to 647 million euros. In the current fiscal year, CEO Christian Bruch wants to reduce the group’s losses “very much”. Investors had probably expected a worse result. However, after significant gains in morning trading, the stock closed just 0.2 percent up.
Siemens had spun off its energy technology a good two years ago and listed it on the stock exchange as Siemens Energy. While the low-margin power plant division “Gas and Power” has since developed well thanks to restructuring, the renewable energy subsidiary Siemens Gamesa has not emerged from the crisis despite repeated changes in management.
Mercedes Benz: The papers noted with a discount of 6.2 percent at the end of the Dax. Investors are taking profits at the automaker after the recent rally to a high since June. There is also a report by the Bloomberg news agency, according to which the group has significantly reduced the prices for electric cars in China.
Dermapharm: The Bavarian drug manufacturer is on course despite increased energy and raw material costs. CEO Hans-Georg Feldmeier named the wide range of products as the reason for the positive development. The paper rose by 2.5 percent.
Evotec: The paper fell 6.3 percent to 17.02 euros after Deutsche Bank downgraded the title to “hold” from “buy”. The analysts lowered the price target to 21 from 26 euros.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.