Double Bottom in the DAX: Are the Bulls Ringing in the End of the Panic?
The German leading index demonstrated true staying power at the start of the week. After an initial dip on Monday morning, buyers impressively triggered a reversal and conjured up a positive start to the week on the trading floor. With a solid gain of 1.18%, the DAX closed the session at 22,562.88 points. Even if the overarching downtrend hasn't formally been broken yet, a massive double bottom is forming here. It seems as though the market has gradually fully priced in the horror scenario of the Middle East war. Initial rumors of tangible progress in negotiations with Iran are now bravely luring investors out of hiding. If this momentum continues today, Tuesday, the psychological bastion of 23,000 points will inevitably come into the crosshairs—even if brutal bear resistance is to be expected there.
The Trump Factor: Between Geopolitical Poker and $100 Oil
But absolute caution remains the order of the day. Under Donald Trump's U.S. administration, abrupt changes in direction and contradictory news are on the daily agenda. A single statement from the White House can catapult financial markets in one direction or another at any time. In fairness, however, history dictates: at the end of his diplomatic rollercoaster rides, there is usually a deal. As soon as this takes concrete shape in the Gulf, the trading floor should relax massively. Until then, however, black gold remains extremely expensive. As long as the strategically vital Strait of Hormuz is blocked, the price of oil is likely to stubbornly remain at the high level of around $100 per barrel and hang over inflation developments like a sword of Damocles.
Tech Weakness Drags Infineon into the Vortex—BASF Also Stumbles
At the individual stock level, the current weakness of the U.S. technology market left clear skid marks. Infineon was hit particularly hard: the chip manufacturer posted the third-weakest performance among the 40 DAX companies on Monday with a drop of 1.2%. Only the shares of Deutsche Bank (-1.9%) and BASF, which ended the trading day with a 1.2% discount exactly like Infineon, slipped even deeper into the red. After the Infineon share jubilantly marked an annual high in February, it has now transitioned back into a noticeable downtrend. From a technical perspective, the bulls' last hope now rests on the saving support at around €35—provided the U.S. tech sector manages to find its way out of its own slump in a timely manner.
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