DAX Market Analysis, November 2021

DAX Market Analysis, November 2021

den 11 november 2021

In October, DAX finally tested the long-awaited exponential moving average EMA6 line on monthly chart (below), first time since November 2020. A rebound back up followed, however October closed below September high. Monthly candle for October was ultimately green with little over 3% gain for the month. So in the big picture DAX remains solidly in the uptrend but short term direction is technically unclear and sideways movement is quite possible. “Fear volatility index” VIX came down in October which should be a bullish sign. Also 4th quarter of the year is historically strong so it is quite possible we still see new all time highs for DAX during 2021.

EMA6 and EMA12 lines (shown in the graph below) are clear levels of support for DAX. It is almost impossible to define clear longer term levels of resistance in the current situation with DAX at all time highs, above yearly R1 pivot and no clear trend channel within the uptrend. So it might be the best to see for short term trades from dips while keeping in mind the big trend should be up.

Note: Past performance is not a reliable indicator of future results.

Long term levels of support: 15560, 15000

Long term levels of resistance: -

Weekly chart below - October low point and EMA6 test happened during the first week and strong rebound created a bullish weekly candle. And for the rest of month direction was up, following weekly  EMA6 and EMA12 lines. Monthly R1 and R2 pivot levels (16032 and 16385) are interesting to follow as possible levels of resistance to take short positions.

Note: Past performance is not a reliable indicator of future results.

Midterm levels of support: 15600, 15080, 14480

Midterm levels of resistance: 16030, 16380

For a long swing trade, weekly EMA12 line is a potentially good area for entry (currently at 15680) but defining clear take profit levels is difficult as DAX is moving at all time high levels. For example TLNG DAX VT553 is one potential option.

For a short view, aforementioned weekly R1 (16032) and R2 (16385) levels could be considered as entry points. It is hard to see other obvious points from technical perspective for swing trades. We recommend caution when shorting as Q4 is historically strong for DAX. For example TSRT DAX VT382 could be considered as an interesting option.

Note: Past performance is not a reliable indicator of future results.

Above: DAX average monthly movement - fourth quarter has been historically strong.

Above: McClellan oscillator is bullish, but reading is high which often has meant that biggest gains have already happened and it is more range movement ahead.

Above: Split of shares in DAX between those above and below their respective (displaced moving average) DMA20 averages. Indicator is bullish - here reading is also high but not so high that it would indicate potential pullback.

Above: Summary of technical indicators for DAX. It is so bullish that this could be a contra indicator for small pullback.

Note: Past performance is not a reliable indicator of future results.

Note: Past performance is not a reliable indicator of future results.

Above: Historical weekly and daily movements for DAX. Direction should be clearly up, historically speaking.

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.

2022-01-27 11:55:08


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