Düsseldorf The German stock market started trading on Tuesday. In the first hour, the Dax is 0.2 percent up at 13,759 points. Yesterday, Monday, the leading index ran out of enthusiasm after the initial record hunt. The leading index closed at 13,727 points. In the morning, the Frankfurt benchmark had set a new record with 13,907 points.
A look at the chart of the past trading days shows: In the area of 13,600 points, there is currently lively buying interest, and there is currently serious resistance there. But the momentum is now missing on the way up. The new record high from yesterday Monday was only four points above the previous record and profit-taking set in quickly.
The reason for the lack of momentum: There are only a few investors who would be wrong if prices rose. This can be seen from the Handelsblatt survey Dax Sentiment and other indicators.
Investors have dispelled speculation
Both private and institutional investors hardly ever speculate with riskier leverage products on rising prices or use these instruments to hedge against falling prices. The corresponding indicators such as the Euwax sentiment on the Stuttgart Stock Exchange and the put-call ratio on the Frankfurt derivatives exchange Eurex are in the neutral range.
Since no investor has to change their behavior when prices rise, the upward trend is unlikely to be dynamic either. Because the investment rate of all investors is currently very high.
The high investment quota naturally creates a higher risk of falling prices because only a few investors can buy more. “A correction is possible at any time and would quickly lead to greater price losses, which would then be offset just as quickly,” says sentiment expert Stephan Heibel after evaluating the Handelsblatt survey Dax-Sentiment.
Because the mood of investors remains positive. And with falling prices there would also be no need to sell leveraged speculations on rising prices, which in many cases accelerates the downward trend.
Seasonal factors speak for a friendly stock market month of January
There are always interesting seasonal analyzes on the markets. Fund manager Sven Lehmann from HQ Trust has the “additional income of a month depending on the previous month’s return”. So: What is the probability that prices will increase in the coming month after a good month – and vice versa. The basis was the US selection index S&P 500.
The result: In the past 150 years, an above-average December was followed by an above-average January. After a plus of 3.8 percent in the S&P 500 last month, that gives hope for this month.
The most important topic for investors at the moment is the by-election for the US Senate in the state of Georgia. This should also affect the dollar rate and the gold price. “Recently, the likelihood has increased that the Democrats will win both seats, bringing them to the House of Representatives
Majority in the Senate, ”said Commerzbank analyst Daniel Briesemann. “This would reduce the planned expansionary fiscal policy of the
newly elected US President Joe Biden. ”
If the Democrats win both seats, there is much to be said for a further increase in the price of gold. It’s currently at $ 1940, close to a two-month high.
For the dollar against the euro, on the other hand, experts say the success of the Democrats would be an additional burden. Because the greenback has already fallen by around eight percent against the common currency in the past six months. The euro is currently trading at $ 1.2268. For the analysts at Commerzbank, today’s runoff for the foreign exchange market is “not a choice between dollar strength and weakness, but between slower and faster dollar devaluation”.
View of Hochtief and Grenke
High Low: The construction company has received the contract to build the 2.2 kilometer long tunnel in Hamburg Altona. The order volume is 580 million euros net. As the consortium leader, Hochtief has 65 percent. Work on the noise protection tunnel, including entrances and exits, is scheduled to start in April 2021. Completion is scheduled for 2028. The share rose 0.6 percent at the opening.
Bitter: The corona pandemic does not leave the leasing company without a trace. In 2020, new business in the leasing division fell by 29 percent to 2.03 billion euros. In the fourth quarter, the renewed lockdown was clearly noticeable. The volume of the newly concluded leasing contracts fell by almost half from October to December to 427 million euros.
Grenke did not provide any information on the current balance sheet investigations into allegations of fraud by a British investor. The share price has not recovered from these allegations. In mid-August the rate was 73 euros, today, Tuesday, it is 37.40 euros, an increase of 0.2 percent compared to the previous day.
What the Dax chart technology says
The range between 14,700 points on the top and 13,500 points (specifically 13,460 points) on the bottom is currently important for the technical analysis. It is quite possible that the German benchmark index will test the lower support at 13,500 / 13,460 points in the coming trading days.
Two upward price gaps from December 2020 are still open. Such gaps arise when the highest level on one trading day is below the lowest level on the following day. You’re sort of a re-evaluation of the market because there was no trade between the gap.
These two gaps in numbers: On December 22nd, the highest DAX price was 13,441 points, the lowest one day later at 13,456 points. This gap coincides with the month-long Corona high of 13,460 points, which the leading index reached at the beginning of September. This underlines the importance of this support brand.
The second and more important loophole was torn in late December. On December 28 the Dax low of the day was 13,740 points, well above the highest price on the previous trading day (Wednesday, December 23), which was 13,602 points. This gap has now narrowed to 45 points because the Dax slipped to 13,647 points on yesterday’s trading day.
This lower limit of the price gap can be used by strategic investors as a stop-loss mark. It also harmonizes well with the 2018 high of 13,597 points.
The 200-day line, which is primarily the focus of many long-term investors, continues to turn upwards with great dynamism. This average line is currently at 12,300 points – an increase of around 25 points compared to last Wednesday. Such a rise in the 200 line should also be interpreted by foreign investors as a sign of a stable upward trend.