DAX Market Review, February 2019

DAX Market Review, February 2019

12 February 2019

Tax advance in January 2019 over 6% which is a very good start for the new year especially when you take into consideration that January is historically a weak month. the volatility and swings has been declining in January. we saw two strong advancing days in January which were followed by range trading.

During the last trading day of January we saw rising volatility where DAX moved over 250 points intraday. This is a sign of warning that volatility and rougher swings could be waiting around the corner. The area 11000 / 10900 is the first more important support area. It would be bearish if DAX declined again below 10900, next important support area is found around 10600 / 10500.

EMA6 is still below EMA12 and both averages are functioning as resistance going forward. When EMA6 crosses below EMA12 on the monthly chart, it is likely that the lows are tested several times before a bottom is found. There are however exceptions; 2011 when EMA6 crossed below EMA12 DAX did not consolidate but did a sharp reversal to the upside. It is however a more likely scenario, that we see similar price action compared to 2015-2016 when DAX tested the bottoms several times before a strong reversal to the upside.

Long term trend support levels: 11000/10900, 10600/10500
Long term trend resisntace levels: 11350, 11800, 12000

On the weekly chart that illustrates the mid term (chart below), DAX is still inside a declining trend channel (linear regression channel on the chart). DAX has now tested the area 11350 several times and the price should break above this key area before the mid term trend price pattern would turn more bullish.

Support levels: 11000, 10900, 10600
Resistance levels: 11350, 11500

The investor bullish sentiment has been declining a bit and the bearish sentiment has in turn advanced. When the bearish sentiment turns greater than the bullish sentiment, there has been historically a rising volatility in the SnP500 index. DAX is usually a more volatile index than SnP500

The technical indicator summary of world futures are flagging strong buy for the short term. On the mid term the situation is unclear and for the longer term they are in neutral territory.

Almost all Indices have performed positively since the start of the year.  

February has historically been a weak month for DAX. March and April has been bullish months where April belongs to one of the more bullish months of the year.

The more part of the underlying stocks in the DAX index is above its 20 day moving average. Although this is a bullish sign, the figure is statistically a bit high and a pullback or consolidation is to be expected.

The DAX McClellan oscillator is also in positive territory which is a bullish sign. We can also see high readings on this indicator with a negative divergence. We should now use this as a contra indicator because of the negative divergence.

Above the technical indicators summary of the underlying stocks in the DAX index. The short term is in strong buy mode but actually a bit “overbought” and a consolidation/correction to be expected. The mid term trend is unclear and the long term trend is still in strong sell -mode.

The technical situation per stock per timeframe

Summary of the stocks in the DAX index since start of the year.

19/09/2019 10:35:47

 

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