DAX Market Analysis, August 2022

DAX Market Analysis, August 2022

09 August 2022 from Traders.fi

July was a slightly positive month for the DAX index and especially the weekly chart indicated bullish movement - at the end of July, DAX had climbed above EMA12 average and tested EMA6 levels - and at the time of writing this analysis, the index is above both moving averages and it is critical for the bulls that the index stays above both moving averages the incoming weeks. If the index manages to stay above both EMA12 and EMA6, it is probable that we’ll see further bullish action. In many news articles, there is speculation around interest rate hikes and if these are already priced into current market corrections and at least more bullish movement for the short term.

The long term trend for DAX continues to be bearish and also the monthly EMA12 level (13847) is a significant resistance level - if DAX manages to climb above EMA12, it is possible that on a technical level the bullish move gets stronger. 13850-14000 level is a important zone for which direction the DAX index will continue to follow.

Note: Historical movement is not a reliable indicator of the future

Long term support levels: 12185, 13000
Long term resistance levels:  13850, 14200, 15000

On the weekly chart below DAX EMA12 average has been setting the resistance level for the bearish trend. S1 pivot point held its support, followed by an almost immediate EMA12 crossover. Now it is crucial to follow if the DAX index manages to stay above EMA6 average - and it is very likely that the DAX index will test EMA6. On the upside 13850-14000 zone needs to be climbed above for the bullish move to continue.

Note: historical movement is not a reliable indicator of the future

Midterm support levels: 13100, 13380
Midterm resistance levels: 13870, 14200

For a long swing position it is fairly “simple” to picture a strategy where a long position is taken from the weekly chart moving average EMA6 level - if this level holds, this trade should work out. e.g. TLNG DAX V1533 could be a possible instrument for this trade.

For a short swing trade the same EMA6 can be used on the down side, the monthly pivot R1 level functioning as stop-loss/knock-out level. E.g. TSRT DAX V1398 could be a possible instrument for this trade:

Note: historical movement is not a reliable indicator of the future

Above: DAX average monthly movement - historically August has been the worst performing month of the year.

Note: historical movement is not a reliable indicator of the future

Above: McClellan oscillator is now in bullish territory.

Note: historical movement is not a reliable indicator of the future

Above: Split of shares in DAX between those above and below their respective DMA20.

Above: Summary of technical indicators for DAX. The message is unclear

Above: Summary of technical indicators for futures.
Above: summary of technical indicators for futures. Here the picture starts to turn to the buy side

Note: historical movement is not a reliable indicator of the future

Note: historical movement is not a reliable indicator of the future

Note: historical movement is not a reliable indicator of the future

Note: historical movement is not a reliable indicator of the future

Note: historical movement is not a reliable indicator of the future

Above: Historical weekly and daily movements for DAX.

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.

05/10/2022 18:03:08

 

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