Friday, September 22

DAX Analysis, Long-Term Average Support as Investors Eye Fed

Yesterday was a holiday in the US and the European session was pure paperwork, today investors remain concerned about faster policy tightening in the US as earnings season kicks off.

The 2-year US bond has exceeded the psychological level of 1% yield, pushing up all yields of other terms. The reason is the rumors that the Fed could be more aggressive already in the next monetary policy meeting that will take place next week, this puts more pressure on technology and growth stocks.

DAX: the low of the session is the level to watch

The DAX is down 0.96% today, however, is finding support at the long-term weighted moving average and the low of the day is the level to watch from now on, since if it is lost, it is more likely that higher sales will enter in the following days.

The technical indicators are crossed to the downside, both the momentum and the MACD, however, being so close to the average, it could most likely be a lateral movement in the short term that allows intraday trading, rather than positioning in Swing.

Above, the key resistance is at 16,288 points, if it were to exceed it, the future would give free rein to look for 16,535 and 16,978 in extension.

At a sectoral level within the German market, the strongest in order are: insurance, chemicals, utilities, automobiles and banks.

Regarding the strength of shares within the DAX, now only stand out: E.ON, BMW, Allianz and Munich RE.

What does the positioning of IG clients tell us?

Retail trader data shows that 52.39% of traders are net long with a ratio of short to long traders of 1.10 to 1. The number of net long traders is 32.76% higher than yesterday and 17.76% higher than last week, while the number of net short traders is 15.12% lower than yesterday and 18.62% lower than last week.

We generally take a contrarian view to crowd sentiment, with traders net-long suggesting German 40 prices may continue to fall, although even positioning indicates we could enter a sideways environment. .

Selling could accelerate from losing nearby support.

How to trade on the DAX?

With the Turbo24 we can adapt the leverage of our operations and be covered against market gaps. In addition, Turbo24s do not have commissions and it is a product quoted on a 24-hour market, with the advantage that if there are increases in volatility when the market is closed that activate our knockout, the operation is not closed. This implies that, if when opening the cash market it does so in our direction, we will continue to be inside and we could continue to obtain benefits. If, on the other hand, when the market opens it does so at a price equal to or greater than our knockout price, we are guaranteed the maximum loss at that amount initially deposited, so we would be covered against market gaps.