Düsseldorf The German stock market starts the new trading week with no clear direction. Notated in the morning the Dax practically unchanged at 13,792 meters. Last Friday, the leading index closed 1.4 percent lower at 13,787 points. The trading volume this Monday is likely to be rather low. In the USA, the stock exchanges remain closed on Martin Luther King Day.
Today’s trading day goes to the Corona winning shares again in view of the impending tightening of lockdown measures. Maybe it’s even the young traders buying their favorite stocks this Monday.
Chip manufacturer leads in the Dax Infineon the list of winners (plus 3.8 percent, followed by the delivery service Delivery Herowhich achieved a plus of more than one percent even without business in Germany.
The Dax has been in a short-term correction mode for a week. The previous low of this correction is 13,673 points, reached last Friday. Just below that, at 13,500 meters, is an important technical chart mark.
Investors will be eager to see whether the German stock market behaves as it did in the past in the run-up to new or tougher lockdown measures. So far, the following picture emerged: The prices gave way or even crashed downright. But after a lockdown was decided or tightened, prices rose again.
This scenario occurred three times: in mid-March and early November of the previous year and the beginning of the current year. When the measures were tightened on January 5, the German stock market barometer was now at 13,566 points, the previous low of the still young stock market year 2021. Three trading days later, the record high of 14,132 points was reached.
Tomorrow, Tuesday, Chancellor Angela Merkel and the heads of government of the states are likely to tighten the existing measures again, according to media reports. It is possible that the familiar behavior pattern will reappear on the stock market. An important condition for this: the production of the listed companies must not suffer from the new measures.
It is worth taking a look at the “honest Dax” again. That means: on the price index, the stock market barometer without taking dividends into account. In contrast to the performance index, in which dividends are included, this has not yet reached a high. With currently 5957 points, it is still well below its record level, which it reached at the beginning of 2018 with 6444 points.
The positive news: From a technical point of view, there is much to suggest that the price index will soon climb new record highs. The important resistance at 5600 meters was overcome. And as long as this mark “holds”, it should soon surpass the record high of 6,444 points. A spurt above the highest mark from last year (6137 points) would support this perspective.
Mixed news comes from investor sentiment. According to the Handelsblatt survey Dax Sentiment, there is no longer any euphoria among private investors, which is positive. Because euphoria is a contra-indicator and signals falling prices. A rather small minus of 1.9 percent in the past trading week has already ensured this. However, investors are not very willing to buy. Both together speak for a continuation of the ongoing correction.
A positive economic development can be observed in the Middle Kingdom: Despite the burdens from the corona pandemic, China’s economy achieved significant growth in 2020. According to the Beijing statistics office, the second largest economy grew by 2.3 percent in the past year. Growth was greater than many analysts had expected. According to forecasts, China is the only major economy that did not shrink in 2020.
The inauguration is on Wednesday of the new President Joe Biden at. Then the Trump era will officially end. According to a report in the “Wall Street Journal”, the future Treasury Secretary Janet Yellen has announced that she will not want to artificially push the exchange rate to stimulate the US economy. A weaker dollar makes American exports cheaper on the world market, which increases demand.
In the past, Trump has regularly complained in public about what he considers to be an excessively strong dollar. In this respect, Yellen could quickly put an end to the discussion that flared up again and again. However, the media report on Monday morning had little influence on the euro-dollar exchange rate.
Look at individual values
Symrise: A negative analyst comment pushes the share of the flavor manufacturer into the red. It falls by around 1.7 percent to 99.40 euros. The experts at Morgan Stanley have downgraded the stocks to “Underweight” from “Equal-Weight” and lowered their target price to 90 from 92 euros.
Lufthansa: A lower price target causes some investors to exit the Lufthansa. The airline’s shares fell 3.4 percent to 10.16 euros. The experts at HSBC have reduced their target price to 3.50 from four euros.
Report: The number of passengers at Frankfurt Airport collapsed in 2020 due to the corona pandemic. The number of passengers fell by 73.4 percent to 18.8 million passengers. “The number of passengers in Frankfurt was at the level last seen in 1984,” said Fraport-Chef Stefan Schulte. The share price is down 2.4 percent and is around the 2016 level at EUR 44.90.
Aareal Bank: The hope of a dividend is pushing the disappointment of Aareal investors about the bank’s annual loss into the background. The shares of the real estate financier rose after an opening loss of almost five percent by 2.7 percent to 20.50 euros. Aareal plans to distribute EUR 1.50 per share, provided the supervisory authorities agree.
Carrefour: The withdrawn takeover offer from Canadian competitor Alimentation Couche-Tard brockt Carrefour another price fall. The shares of the French supermarket chain fall 7.3 percent in Paris. On Friday they had lost similarly because of the French government’s opposition to the deal.
What the Dax chart technology says
Investors should currently look at the bottom of the Dax. The focus is on the 13,500 point mark. Medium-term investors can lower their stop-loss mark in this area. Because a slide under the former “breakout mark” would be a negative signal.
The calculation behind it: For almost six months, the German benchmark index moved sideways between around 13,500 points (exactly 13,460 points) on the top and 12,300 points on the bottom. Only at the end of October, shortly before the US presidential election, was this phase interrupted for a few trading days when the Dax slipped to 11,450 points. In retrospect, that was the signal for the strong continuation of the rally that followed.
Based on the bandwidth of the month-long sideways movement within 1200 points (13,500 minus 12,300), according to technical analysis, the coming trading range can also be estimated. That should have a similar width, so the Dax – roughly estimated – fluctuates between 13,500 points on the bottom and 14,700 points on the top.