Dusseldorf The mark of 14,000 points is still the measure of all things on the German stock market. On the last trading day before Christmas, the Dax only reached this level for a few minutes before falling again. In the last hour of trading, the Dax picked up speed again and finally closed 0.19 percent higher at 13,941 points.
The mark of 14,000 points, which is often referred to as “psychologically important”, does in fact currently have an important influence on the Dax. Since the fall in price as a result of the interest rate decisions by the Fed and ECB last week, the Dax has been hovering around this level almost every day. But only once – on Wednesday – did the leading index manage to go out of trading with over 14,000 points. Then it went backwards again.
Should the Dax pass this mark sustainably, the next endurance test is already waiting. The price level of around 14,150 points is the lower limit of the sideways trend that lasted several weeks before the said interest rate decisions by the central banks.
Since mid-November, this area has been a support for the stock market barometer, which it broke down after the central bank decisions and only briefly regained it – on Thursday. So, this support has turned into a key resistance that investors should keep in mind.
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>> Read here: 14 Factors When and How to Sell Stocks
As a reminder: After the 2700-point autumn rally in Germany’s top stock exchange league, the Dax moved sideways for five weeks, almost continuously between almost 14,600 points on the top and just 14,150 points on the bottom.
Since then, the price declines triggered by the Fed and the ECB have been very moderate. The history low is 13,791 points. The previous, slight consolidation is a healthy process after such a dynamic increase in a short time. It usually turns out to be even stronger.
The fact that this did not happen proves that below 14,000 points there is still lively interest in buying, a kind of stability anchor for the Dax. This creates good basic conditions for the remaining trading days in this stock market year.
The only date relevant to the stock market on Friday was economic data from the USA. US consumers only increased their consumer spending by 0.1 percent compared to the previous month, despite the fact that inflation is falling again slightly. The forecast was 0.2 percent after a revised 0.9 percent gain in October. Private consumption is the most important pillar of the US economy.
In addition, US industry received surprisingly few orders in November. Orders for durable goods such as aircraft and machinery fell 2.1 percent from the previous month (forecast: minus 0.6 percent).
The influence of economic data on the stock markets is currently paradoxical anyway. Actually, strong data should inspire the courses. The opposite is currently the case: investors fear tighter monetary policy over a longer period of time. This in turn makes it difficult to classify price movements.
Now it depends on the private investors
The currently low trading volume is not surprising. In the current trading week, an average of almost 48 million papers were traded every day. A trading volume of between 60 and 70 million shares per day is usual.
Daily turnover will also remain low over the next few trading days. In 2021, the number of papers traded between Christmas and New Year was around 30 million. At the beginning of the new year, the trading volume usually picks up again significantly.
The vast majority of professionals have already closed their books for 2022 and said goodbye to the Christmas holidays. Short-term, key date purchases and sales for balance sheet cosmetics before December 31 – known in technical jargon as “window dressing” – are likely to have already taken place. The pros who are still active are holding back. A realignment of the portfolio in the last few meters of a stock market year would be unusual.
Consequently, it primarily depends on the private investors. If there should still be a surprising year-end rally, they have to give the go-ahead.
>> Read here: What strategists expect for the Dax in 2023
The low turnover offers opportunity and risk at the same time. With only a few active investors, even minor influences are enough to drive prices more strongly in one direction – up or down. Trading proved that again on Thursday. There were 270 points between the highest and lowest trading level.
However, the number of stock exchange-related dates for the next few days is extremely low. Large price jumps could therefore simply not occur.
In this mixed situation, it is almost impossible to make a forecast. In view of low sales, a lack of external influences, a (still) stable downward hedge and stubborn resistance on the upside, it is a realistic scenario that the Dax initially remains between 13,800 and 14,150 points.
Gas prices continue to fall
In view of the meanwhile mild winter weather, the price of gas continues to fall. On the Amsterdam Stock Exchange, the futures for delivery in January in the evening are nine percent lower at 82 euros per megawatt hour. This TTF contract often serves as a guide for the European price level.
The price was last this low in mid-June. On a weekly basis, the minus is about 25 percent. In the summer and autumn, the prices were up to 346 euros per megawatt hour in an extremely dynamic process.
Individual values in focus
Biontech: The Omicron vaccine from the Mainz-based biotech company and its Chinese partner Fosun Pharma is now regularly approved in Hong Kong. The company said on Friday that Comirnaty was the first and only vaccine to be approved for booster vaccinations in Hong Kong. In addition, Biontech starts clinical tests of its malaria vaccine. The share initially gains up to two percent, turns into the loss zone in the evening.
Unipers: The share lost more than 15 percent on its last day of trading in the SDax. The utility, which has since been nationalized, has to leave the index of smaller stocks because the free float has fallen below the necessary ten percent threshold. The state holds almost 99 percent of Uniper. The fuel cell manufacturer SFC Energy will take the vacant place after Christmas.
Ferronordic: The sale of the business in Russia pushes the stock to its highest level since the Russian invasion of Ukraine. The Swedish manufacturer of construction machinery and trucks is selling its Russian business to a Russian leasing company for 1.32 billion crowns (the equivalent of around 119 million euros). The papers jump up by 60 percent at times and are at 78 crowns in the evening. At the beginning of January they were still trading at just under 370 crowns.
Here you can go to the page with the Dax course, here you can find the current tops & flops in the Dax.