Dusseldorf The 15,000 point mark was tested again on the German stock market. But then the Dax limits losses and is currently listed at 15,161 points, down by only 0.6 percent compared to the previous day’s close. The situation looked dramatic in morning trading: the leading index slipped to 14,984 points, the lowest level in four months. The important mark of 15,000 points appeared to be in danger.
The leading index was able to recover significantly from the short slide under this bastion, but the resuming sales in the afternoon show that the decision about this important brand has not yet been made. It is quite possible that a new test will take place in the next week. Because the downward trend is not over yet.
Because a simple look at the chart shows: The Dax has been in a short-term downtrend since the first week of September. On a weekly basis, both the highest prices and the lowest prices keep getting lower – the classic definition of a downward movement.
This trend was confirmed this Friday: The Dax temporarily slipped below the low of 15,019 points last week. Should the leading index, however, manage to climb above the high of the previous week of around 15,700 points, the downward movement would be stopped. But that is very unlikely. As long as this downtrend is intact, investors should act cautiously.
Top jobs of the day
Find the best jobs now and
be notified by email.
Today’s trading day was about the 15,000 point mark, which is important for three reasons. First, for psychological reasons. For many investors, round brands are more relevant. The media are also more focused on this.
Second, the Dax has found a stop there twice in the past few weeks, two downright sell-offs ended there. This was most recently the case on Monday of last week, when the Dax reached 15,019 points, the lowest point of its consolidation since the record high of 16,030 points.
And third, the 200-day line is currently almost exactly at this point. One only has to look at the course of the correction in October of last year to see the meaning of this line. When the Dax slipped below this line in 2020, the index was traded around 700 points lower one day later.
Exchange history is rarely repeated exactly. But if the Dax again sustained, i.e. per day’s closing price, slips below the 200-day line, investors should take into account a larger sell-off.
Because this 200-day line shows the long-term trend and is accordingly taken into account by longer-term investors who throw higher quantities on the market if the brand breaks.
The euro, which has been weak for some time, suggests that foreign investors in particular have been selling European stocks in the past few days. The common currency hit a new annual low of $ 1.1561 in early trading today, Friday. A week ago that value was $ 1.1726. Interesting: the rebound on the stock market at lunchtime was accompanied by a rising euro. Have foreign professionals returned?
According to the latest Bank of America survey of more than 200 international asset managers, the number of investors who expect a longer equity rally in Europe has even increased recently – although the assessments of economic developments have become more pessimistic. A reduction in this rate cannot leave the Dax without a trace.
The stock market month of October precedes its reputation as a crash month; it last confirmed this reputation in 2008 during the financial crisis. At that time, the index slipped by more than 25 percent. Comparisons with the situation at that time and the current month on the stock exchange are dubious, there are no signs of a crash. But the start in October 2021 was at least stormy.
Look at the individual values
BMW: The paper increases by around one percent. The automaker has raised its forecast for the second time this year.
Leoni: The Nuremberg-based auto supplier has found a buyer for its business with cables for industrial applications. The Leoni Industrial Solutions division is to be sold to US competitor BizLink for around 450 million euros including debts. BizLink’s board of directors has yet to approve.
In 2020, the division generated sales of 430 million euros, a good tenth of group sales. BizLink, based in California’s Silicon Valley, is listed on the Taipei Stock Exchange and is valued there at a good billion US dollars. The Leoni share rises by 5.1 percent.
Telefónica Germany: A sell recommendation by Exane BNP weighed on the MDax Telefónica Deutschland, for the papers it went down by almost six percent to 2.31 euros. The French investment bank had downgraded the share from “outperform” to “underperform” and lowered the target price from 6.00 to 2.90 euros.
Hella: The share will be traded ex-dividend on Friday. The closing price on Thursday was € 60.44, the price being paid € 0.96.
What the Dax chart technology says
For three months, the Dax has moved between 16,000 points on the top and around 15,000 points on the bottom. Now the focus is on the sub-page, which for Jörg Scherer, technical analyst at HSBC Germany, has “a very strategic character”.
On the upside, a new downward price gap was torn with today’s start of trading. Such gaps arise when the highest level on a trading day is below the lowest level on the previous day. They are considered a sign of weakness. But in the course of trading, this gap was closed with prices above 15,248 points. From a technical chart point of view, this is a first signal of relaxation.
Here you go to the page with the Dax course, here you can find the current tops & flops in the Dax.