ABSTRACT: The daily chart shows that the DAX has clearly lost substance since the end of July. In the course of the pullback, it fell below both the SMA20 (currently at 16,060 points) and the SMA50 (currently at 16,103 points). While the bulls have been trying for days to push the index back above these two lines, the attempt has failed. Although the daily chart can still be interpreted as neutral, the bearish tendencies have increased.
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Current DAX analysis on 08/19/2023: chart analysis, Weekly Outlooktrading setups and more – for active day traders
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DAX framework conditions:
Inflation in the euro zone continued to fall in July. It is currently at 5.3% compared to 5.5% in June. This data was released on Friday. This is the lowest inflation rate since January 2022. Nevertheless, and central bankers are paying close attention to this, core inflation has not fallen. Core inflation reflects price increases excluding the volatile prices for goods such as energy. It stayed the same in July at 5.5%. The upward pressure on prices in the different segments turned out to be different. For example, inflation for food and beverages is still 10.8%, but the momentum has weakened significantly. The prices for energy and for industrial goods rose less sharply than in the previous year; On the other hand, the prices for services have risen. Inflation is expected to fall further in the second half of the year; core inflation is likely to fall, but no less sharply. The price increase is still well above the target of/close to 2% – the ECB left the further course of interest rate policy open at its last meeting.
The stock markets have come under pressure this week, particularly as a result of news from China. The overall economic data for the past few months has been deteriorating, despite the measures taken by the central bank and the government in Beijing. In addition, there is the imbalance in the real estate industry, which could get worse. The real estate sector in particular has been the growth driver of China’s rise over the past two decades. Should the problems in this area worsen further, a domino effect could occur that could have lasting effects on the Chinese economy as well as on the global economy.
DAX review: (08/14/2023 – 08/18/2023)
The DAX went into pre-market trading on Monday morning at 15,842 points. The index is 137 points below the first premarket listing on Monday morning of the previous week and 69 points below the weekly close on Friday evening of the previous week. The DAX was initially able to recover on Monday and in the course of the recovery rose to almost 16,000 points. By the evening, however, parts of the profits had been equalized again. However, the bulls were able to push the index up again on Tuesday, this time reaching and just exceeding 16,000 points. After the weekly high was formatted, the listings fell significantly. The weakness lasted until Friday afternoon. By then there had been minor recoveries, but these were immediately sold off again afterwards. The relief movement on Friday afternoon and evening went above 15,600 points again. The DAX went to 15,624 points from the weekly trade.
The weekly high was formatted above the 16,000 point mark, but below the level of the last trading week. The weekly low was also found below the previous week’s level. A weekly loss was reported in the past trading week, the 13th this year. This is offset by 20 winning weeks. The range was larger than in the previous week.
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On the upside, we had expected that the DAX could start at 16,018/20 points, our next target on the upside, after exceeding the 16,005/07 point mark. This movement has set in, the start-up goal was not quite achieved, the setup did not fit optimally. The setbacks went below our maximum starting target on the bottom at 15,596/94 points by falling below the 15,612/10 point mark.
DAX – How could it go on:
DAX resistances
- 15,628
- 15.712/14/24/63/89
- 15.841/56/77
- 15.929/75
- 16.011/60/68/91
- 16.103
DAX supports
- 15.594/45/11
- 15.470/41/40/16/00
- 15.362/27/11
- 15.299/48
- 15.191
The most important brands based on our DAX setup:
- Intraday mark 16,055 and 15,540
- End of day marks 16,297 and 14,965
- Break1 Bull (Wo-Close) (13,549)
- Break2 Bull (Mon-Closed) (11,000)
- Boxing range 16,938 to 6,669
- Cyclic movements 2020 – 2033
- Ranges 18,149 to 1,778
DAX chart check – viewing in the daily / 4h chart:
DAILY
The daily chart shows that the DAX has clearly lost substance since the end of July. In the course of the pullback, it fell below both the SMA20 (currently at 16,060 points) and the SMA50 (currently at 16,103 points). While the bulls have been trying for days to push the index back above these two lines, the attempt has failed. It went down significantly in the further course of trading in the past trading week.
Although the daily chart can still be interpreted as neutral, the bearish tendencies have increased. The DAX could still approach the SMA200 (currently at 15,441 points) in the coming trading days. This is where the overriding decision will be whether the bulls or the bears can prevail. If the index manages to stabilize and stay above the SMA200, recovery movements could move towards the SMA20 / SMA50 again. Based on the price patterns, however, we do not expect the index to settle above the SMA50 again in the next five trading days. It is conceivable, however, that these two average lines will approach each other.
If the bears prevail and they manage to push the DAX below the SMA200 and establish it, the chart picture would become bearish, further deliveries would be conceivable and possible, up to the area of 15,240/25 points and then further up to which could go 15,035/14,950 points.
- Classification of higher-level chart image, forecast (daily chart): neutral
Consideration in the 4h chart:
The 4-hour chart shows that the Dax was able to push itself above the SMA50 (currently at 15,856 points) in the course of the last trading day, but did not manage to establish itself above this line. It went below this average line as well as below the SMA20 (currently at 15,724 points). Attempts to cross this line again failed.
The 4h chart remains tarnished. As long as the index is listed below the SMA20, further levies could arise that have the prospect of achieving the start-up targets that have been defined in the daily view.
If the Dax can move above the SMA20 and settle in the course of recovery movements, there is a chance that it could continue upwards in the direction of the SMA50. Only when the index has firmly established itself above the SMA50 is there a prospect that things could go further up towards the SMA200 (currently at 16,068 points).
- Classification short-term chart image, forecast (4 hours): bearish
Conclusion: the DAX must remain above the 200-day line at the end of the day. Should this succeed, recovery movements could set in up to the 20-day line or 50-day line. However, if the index settles below the 200-day line, it could go further down towards the 15,000 points.
- Probability bull scenario based on our setup: 55%
- Probability of a bear scenario based on our setup: 45%
Assessment for the new DAX trading week:
Long setup: the bulls could initially try to keep the DAX above the 15,625 point mark. If successful, it could continue up to our next targets at 15631/33, at 15647/49, at 15663/65, at 15672/74, at 15685/87, at 15692/94, at 15703/05, at 15712 /14, at 15,723/25, at 15,736/38, at 15,748/50, at 15,763/65 and then at 15,779/81 points. Above the 15,779/81 point mark, the DAX could reach our next targets at 15,789/91, 15,804/06, 15,815/17, 15,824/26, 15,835/37, 15,848/50, 15,856/58 15,875/77, 15,890/92, 15,906/08, 15,917/19, 15,927/29, 15,940/42, 15,955/57, 15,967/69, 15,977/79 and 15,990/92 points start up
short setup: if the DAX cannot stay above the 15,625 point mark, the bears would have the opportunity to take the index to our next targets at 15,612/10, 15,596/94, 15,582/80, 15,571/69, 15,556/54 , at 15.545/43, at 15.526/24, at 15.511/09, at 15.494/92, at 14.481/79, at 15.470/68, at 15.456/54, at 15.445/43, at 15.429/27 and then at 15.415/ 13 points to press. Below the 15415/13 point mark, the index could see our next targets at 15401/399, at 15387/85, at 15369/67, at 15351/49, at 15338/36, at 15321/19, at 15311/09 15.305/03, 15.290/88, 15.278/76, 15.265/63, 15.250/48, 15.240/38, 15.227/25 and 15.211/09 points.
Overall expected DAX trend in week 34 / 2023:
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