After the High Flight: Profit-Taking Drags DAX Down – Bargain Hunt or Selling Wave?
It was almost foreseeable that after the brilliant surge on Thursday, profit-taking would set in. This is exactly what happened on Friday, and the DAX pulled back significantly, especially in the afternoon under the influence of the US markets, closing down 0.45 percent at 24,186 points. The question now stands: Is the DAX offering pre-Christmas bargains, or will euphoria quickly be followed by disillusionment in the form of another selling wave?
AI Concerns Weigh on Sentiment: Oracle Delays Pull DAX Down
It was the booming AI industry that caused moments of panic on Friday. Investors and traders are intensely debating how quickly the multi-billion-dollar investments in data centers can actually translate into profits. Oracle's delays in completing projects plunged US stock markets and promptly dragged the DAX down with them. These short-term concerns about the speed of the AI boom's implementation could keep volatility high in the new week.
US Labor Market Becomes Impetus: Did the Fed Hit the Mark?
Despite the current setbacks, it is important to note that December is statistically a very positive stock market month: in the last 20 years, the DAX closed positively in 70% of cases, with an average return of 1.3 percent. The index therefore still has room to run.
A significant driver this week could be the subsequent release of US labor market data (October and November), which is due on Tuesday. The Federal Reserve has already front-loaded its interest rate cut—now it will become clear whether the monetary policymakers hit the mark or if the labor market is in worse shape than assumed. New signs of weakness could further fuel the rate cut fantasy and give the DAX fresh momentum.
DAX Before Upside Gap: 24,500 Points Remain the Critical Hurdle
Technically, the DAX is likely to open today, Monday, with an upside gap. If this gap can be held and followed through from the start, the necessary momentum could be created to overcome the target of 24,500 points this trading week. This mark remains the decisive hurdle on the way to the all-time high. The DAX bears are likely lurking to try and regain control of the price below 24,170 points, which would mean testing Friday's support.
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