Due to the Whitsun holiday, the DAX only opens for trading today. It opened at 11,895 with an upward gap of 309 points. Friday’s closing price was 11.586. It will be exciting to see whether the DAX can maintain this gap in cash trading. At 11,391 there is another open gap. In the last two weeks, the DAX has rallied rapidly, rising by about 1500 points. There seems to be extreme carelessness among investors at the moment. This is also confirmed by the “Fear and Greed Index”. The indication has risen into the “greed” range, with the put-call ratio in particular indicating “extreme greed”.
Fundamental situation of the Dax
It is currently very difficult to classify the DAX fundamentally. In our opinion, the markets are driven by liquidity and FOMO – Fear of Missing Out. On the other hand, the risks are increasing. The trade war is intensified by the situation in Hong Kong. It is true that the measures against China that Trump announced last Thursday have not been as dramatic as the markets feared. But his statements still offer scope for further manoeuvring. In return, China had announced that it was suspending the purchase of agricultural products. The situation in the US offers a further risk. The ongoing demonstrations have not yet been brought under control. It remains to be seen to what extent the risks will affect the stock market. No interesting economic data can be expected today.
The important marks for today and this week
Today is “Turnaround Tuesday”. But that does not mean that the DAX necessarily has to fall. So far it shows no sign of reversal. At the top, there are other markers that it could run into. The DAX is capped in the 11,950-12,000 range. It would have to break through this range to rise towards 12,050 and 12,220. Should there be a correction, the first support is at around 11,850.
11.810 – 30-minute chart
11,679 – 61.8% Recovery
11.575-510 – US from the hourly chart
11,435 – US from the hourly chart
11,240 – previously resistor – now US from the 4-hour chart
11,950 – Target ABC motion
12.000 – psychological mark
12,050 – Fibonacci Extension
12.220 – weekly chart
Photo: Deutsche Boerse AG