Market Analysis

The German benchmark index: first a high, now a sell-off. What’s next?

After early strength, the picture for the leading German index, the DAX, has now cooled. The market has not managed to push itself above 11,150 in the long term.

The market bottomed out at the turn of the year, and then the index recovered. After a bullish weekly close on January 18, the DAX struggled to rise. Although the index continues to test the area around 11,260, it has not succeeded in breaking through with any vigor. The market had finally worked its way through the highs around 11,260 and marked a new high for the year with a momentum candle on Wednesday, followed by a strong sale at the end of last week.

On Thursday of last week, the DAX easily passed through 11,150 heading downward and only stopped in the area of the smooth 11000. On Friday, even deeper lows were tested, and the market just managed to stop at its 38-day line.

The MACD has crossed its trigger line from top to bottom, which in itself is not a good sign. On the positive side, the leading index found its 38-day line. However, this alone is no guarantee that it will go up again immediately.

There may be downward support in the 10,830 range. If the market should break through here as well, there is another structural level in the 10580 range.

On the way up, the zone between 11,010 and 11,150 is relevant. Only if the market can climb above 11,150 again, can the way be cleared to the year high and then into the area of 11540.

Today at 10.00 a.m. GMT the ZEW releases its Economic Sentiment Survey for Germany.  For this survey, around 400 analysts and institutional investors will be asked about their medium-term expectations (for the next six months) regarding economic and capital market developments. The index reflects the difference between positive and negative sentiments.


Ger30 Daily Chart | Source: ActivTrader

Ger30 Daily Chart | Source: ActivTrader 


Written by Daniel Schuetz, External Analyst


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