DAX Market Analysis, October 2021

DAX Market Analysis, October 2021

8. oktober 2021Læsetid: 2 minutter

DAX corrected by ca -4.5% in September with quite significant volatility at times. Shorter trend has turned downwards, first time since September 2020 so we finally saw correction we have been waiting for. In September 2020 the leg down did not last for long so it remains to be seen if this one is also fairly small correction and uptrend resumes quickly. Last quarter of the year is historically strong but it is always a good practice to exercise caution in your positions when weekly exponential moving average EMA12 is below EMA6 and the “fear factor” volatility index VIX is 20 or higher. Also good to keep in mind that DAX usually makes its biggest declines when it is below its daily moving average MA20 on daily chart.

In terms of support levels, 15000 should offer support as it is a psychologically significant round number but also daily MA200 is at the same levels. Also month’s S1 pivot is nearby at 14872. And just to add to that - monthly EMA12 level (ca 14700) has not been tested in an unusually long time so there is potential for that also. So definitely room for DAX to decline more from current levels.

Note: Past performance is not a reliable indicator of future results.

Long term levels of support: 15000, 14800, 14400

Long term levels of resistance:  15500, 16400

Weekly chart below that also shows a clear warning that more downside can be ahead. We have a big red weekly candle with EMA12 crossing below EMA6. In September 2020 this situation was short lived and DAX resumed uptrend towards new all-time high levels - it is very possible that first two weeks of October will show the short term direction for DAX for next 4-6 weeks.

Note: Past performance is not a reliable indicator of future results.

Medium term levels of support: 14800, 14400

Medium term levels of resistance: 15400, 15550

Note: Past performance is not a reliable indicator of future results.

Above the average monthly movement for DAX. Fourth quarter is historically strong.

Above: McClellan oscillator has corrected upwards from lows a few weeks ago but now again below zero which is a slightly bearish sign.

Above: Split of shares in DAX index between those above and below their respective (displaced moving average) DMA20 averages. This indicator has shown weakness for quite some time already.

Above: Summary of technical indicators for DAX. It seems to indicate caution and readiness to also short DAX.

Note: Past performance is not a reliable indicator of future results.

Above: Historical weekly and daily changes for DAX. Historically speaking we should see more up.

Important Notice

This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the securities, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. Past performance is not a reliable indicator of future performance.

08-12-2021 17:22:03

 

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