An end to this correction since the record high of 14,132 points on Friday (8.1) is not yet in sight. “The Dax has the lid on,” says behavioral economist Joachim Goldberg after evaluating the investor survey conducted by the Frankfurt Stock Exchange. He expects profit-taking at the latest in the range from 14,150 to 14,200 meters, with greater demand only to be expected again in the range from 13,450 to 13,500 meters.
A favorite topic in various stock market letters and even among international fund managers, according to a survey by the Bank of America, is the topic of a so-called bubble on the stock exchanges, which is about to burst. The courses will soon slide significantly. The beautiful stock market rule is always quoted: “A bull market is born in panic, grows in fear, matures in optimism and dies in euphoria”.
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Then there is the term maid house boom. The latter is a term for rising stock exchange prices, which are mainly driven by purchases by little-informed small investors and can indicate the last phase of a speculative bubble.
The reasons given for the fact that the market as a whole is euphoric are the developments in various individual stocks. Be it the rally of US tech stocks like Tesla, but also strange price jumps for smaller papers like Heidelbergdruck, the price of which has risen by almost 150 percent in the past three months.
What is true about the observation: There are many young traders active in the market who have been involved in the Corona rally since mid-March. In contrast to the players who have been active in the market for longer and had to process their high losses due to the previous Corona crash, the new ones can act carefree and probably achieved high profits.
But what speaks against a quick end to the rally: There is currently little to be seen of any real euphoria. There is a high level of optimism among investors, but it is not yet overflowing. In addition, the euphoria among investors can last for a long time. This was shown, for example, 20 years ago when the so-called technology bubble burst.
Even then, many new traders came to the stock exchange. From mid-1999, the stock market valuation of numerous companies multiplied within a few months due to significantly increased demand. The final point was a year-end rally in 1999, when the Dax was able to gain another 40 percent within a few months after a favorable year on the stock market. The stock market is still a long way from such a similar scenario.
Look at the individual values
Siltronic: The Taiwanese chip group GlobalWafers has increased its takeover offer for the Munich competitor Siltronic. The offer is now 140 euros per share. All other conditions of the takeover offer remained unchanged. The acceptance period ended as planned on January 27, 2021. The Siltronic shares listed in the MDax closed at 140 euros on Thursday and are still rising. The current rate is 142.35 euros.
The original offer of 125 euros per share was met with little approval from the shareholders, although the Siltronic Executive Board and Supervisory Board had recommended acceptance. By last Friday evening, according to GlobalWafers, only 0.05 percent of the free shareholders had accepted the offer. The Taiwanese company has already acquired 35 percent directly and from Siltronic’s major shareholder Wacker Chemie secured, but aims at at least 65 percent.
Alstria Office: A positive analyst comment encourages investors to join Alstria Office . The shares of the real estate company rose by 1.8 percent to around 14.40 euros. The experts at German bank upgraded the shares to “Buy” from “Hold” and raised the price target to 19 from 18.50 euros.
What the chart technique says
The current guard rails for the German benchmark index are clearly defined: On the bottom, the focus is on the 13,500 point mark. Medium-term investors can move their stop-loss mark in this area, depending on their strategy and risk tolerance. Prices below 13,672 points, the correction low since the record high, would be the first indication of a slide towards 13,500 points.
On the upside, the record high of 14,132 points is the first resistance. It also serves the bank’s technical analysts HSBC the mark of 14,228 points as the next point of contact, which is not far from the current record high of 14,132 points. From a technical chart point of view, a target price of 14,700 meters can be derived in the coming days and weeks.