Dax starts weak – investors buy technology stocks

Dax curve in the trading room in Frankfurt

The development of the coronavirus pandemic also remains in the focus of investors.


(Photo: dpa)

Düsseldorf There is no momentum on the German stock market. Loses in the first trading hour the Dax 0.2 percent and is traded at 13,106 points. On Tuesday, the leading German index closed at 13,133 points, hardly changed from the previous day

Today, Wednesday, as on the day before, the focus is again on the rising number of corona infections and the possible tightening of lockdown measures: The winners in the Dax and MDax are the technology stocks like SAP, Software AG and Bechtle. Also because Software AG has presented good figures.

The well-known cyclicals are on the losing side: MTU, Deutsche Lufthansa, Thyssen-Krupp and also the fork lift truck manufacturer What.

This scenario is likely to repeat itself in the coming trading days and weeks. Whenever the corona infection numbers shoot up, the corona winner shares will rise and the loser stocks will continue to give way.

Much is being written about how much Biontech’s news of a new vaccine has changed the trading world. But when you look at the major indices on the German stock market, there isn’t much to see.

In the six trading days after this moving news, Dax presented itself in a rather listless state. Yesterday, Tuesday, the total trading range was less than 100 points, a tiny minus of just five points underlines this listlessness. The US Dow Jones Index had reached a new record the day before.

Such a low trading margin after significant price gains or losses would be seen as stabilization. But six trading days in a row, comparatively small price fluctuations only shows: Investors are insecure, new impulses are needed.

That’s why the top motto for tactical investors is: Wait until the Dax leaves this trading range. The technical stock exchange rule applies: the longer this sideways phase lasts, the more dynamic the breakout occurs.

Prices above 13,277 counters, the daily high after the vaccine report by the US pharmaceutical company Modern last Monday, this sideways phase would end and probably herald the continuation of the rally. This level goes well with the day’s high after the Biontech-Message from November 9th. On that day, the Frankfurt benchmark rose to 13,297 points.

Prices below 13,005 points, the low of the past six trading days, should, however, initiate a correction. There are many signs that the Dax is about to start a correction. Another rally phase would be a real surprise.
Because the latest reports of success about further corona vaccine successes have remained without a lasting price reaction on the overall market. The lockdown measures in this country are likely to be tightened soon. But nobody knows yet what economic consequences the stricter rules will have.

And in the United States, the number of infections and deaths related to the corona pandemic is increasing exponentially. Over 11.42 million infected people and 248,352 deaths have already been recorded. And the numbers will keep increasing. Because in the USA there has been a power vacuum since the US presidential election, which makes fighting the pandemic much more difficult.

The low US retail sales in the United States and the weak branch business of the shopping giant Wal-Mart indicate what could be ahead: In view of the high number of infections and deaths and an inactive government, Americans are going into a lockdown with uncertain consequences in the consumer-loving country.

Look at the individual values

Software AG: The company is making progress with its corporate restructuring. Therefore, the annual forecast that was cut in April due to the Corona crisis will be increased in some areas despite the recent slump in sales. Investors reward this with an increase of 6.5 percent. The Darmstadt-based MDax company wants to focus its business more on the cloud and thus on recurring sales through subscriptions instead of licenses that are paid for once, and must take some money in hand for this.

German Stock Exchange: The stock exchange operator carries out the largest takeover since the financial crisis. The Hessian company is buying a majority stake in the American Institutional Shareholder Services (ISS) group for around 1.5 billion euros – and is thus banking on the trend towards sustainable investments. The news is well received by the market, with the share rising 0.8 percent.

Look at other asset classes

Bitcoin is climbing again towards a record high. The oldest and most important cyber currency increased by almost five percent on Wednesday to $ 18,491.57. The price has almost doubled within six weeks and is only about $ 1,500 below the record high of the end of 2017.

PayPal’s entry into the crypto business, the flirtation of central banks with digital national currencies and the increasing interest of institutional addresses gave Bitcoin & Co. a tailwind, says analyst Timo Emden from Emden Research.

What the chart technique says

In addition to the short-term range of the past six trading days, the high from September with 13,460 points is important. There is the so-called Corona high, the highest level since the crash in mid-March, when the Dax slipped to 8255 points. Should the barometer break the mark, the record high of 13,795 points will be targeted.

On the downside, strategic stop-loss levels offer some upside gaps as supports. Such gaps arise when the highest level on one trading day is below the lowest level on the following day. According to chart technology, they are considered support.

Specifically: The highest level on Friday (November 6th) was 12,596 points, the lowest price on Monday (November 9th) was 12,671 points. As long as the Dax remains above 12,671 points, from a technical point of view there are no doubts about the current rally.

Here is the page with the Dax course, here are the current tops & flops in the Dax.

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