DAX PERFORMANCE-INDEX (.GDAXI) rack up second day of heavy losses amid coronavirus fears
Global markets extended a nightmare run on Tuesday as coronavirus fears continued to grip investors across the world.
Britain’s top index closed almost 2% down at 7,017.88 points, a 138.95-point drop. It marks a further £35 billion wiped off the index, adding to the £62 billion lost on Monday.
It comes after the FTSE 100 racked up its worst day since 2015 on Monday, as Italy became the first country in Europe to announce a major outbreak of coronavirus.
“Health fears continue to hurt market sentiment as the major equity markets in Europe are all in the red,” said David Madden, a market analyst at CMC Markets.
Britain’s blue chip index was not the only loser on Tuesday.
Germany’s Dax index fell 1.9%, while the Paris-based index Cac lost 2% of its value. Italy’s MIB index, which collapsed on Monday with a 5.4% drop, fared better, down only 1.4%.
Markets had opened on a positive note on Tuesday morning, gaining a few points, but the optimism did not last long and the markets soon turned back into the red.
When the US markets opened, they repeated the same pattern, opening up around 0.3% before dropping back into negative territory.
The S&P 500 lost 1.2%, while the Dow Jones was down by 1.1% as UK markets closed.
HSBC had similar news, but on a smaller scale, saying 46 jobs were at risk as 27 branches across the country were set to close. Only staff from 10 branches face losing their jobs – the others will be moved to nearby HSBC sites. Its shares were down 2%, or 11.1p, to 539.7p.
Aerospace engineering group Meggitt fell 30.6p to 563.8p as it warned over a sales hit from the grounding of Boeing’s 737 Max planes and the impact of the coronavirus outbreak.
Hotel Chocolat was one of the new companies on the London exchanges in positive territory as it posted higher half-year sales, boosted by new stores in the UK and internationally.
The upmarket retailer saw shares jump higher in early trading after it posted a 14% increase in revenue to £91.7 million for the 26 weeks to December 29.
The biggest risers on the FTSE 100 were NMC Health, up 32p to 880.2p, Bunzl, up 49p to 2,050p, Pearson, up 2.4p to 582p, and Prudential, up 0.5p to 1,421p.
The biggest fallers were Carnival, down 166p to 2,639p, Meggitt, down 30.6p to 563.8p, Tui, down 37.4p to 730.2p, Legal & General, down 13.8p to 287p, and AB Food, down 113p to 2,430p.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 13,247.68.
The projected upper bound is: 13,210.04.
The projected lower bound is: 12,359.73.
The projected closing price is: 12,784.89.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 6.8070. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 3 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 31.40. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 69 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -243.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 5 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 1 period(s) ago.
Rex Takasugi – TD Profile
XETRA DAX PF closed down -244.750 at 12,790.490. Volume was 59% above average (neutral) and Bollinger Bands were 79% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 13,556.26 13,394.33 12,634.84
Volatility: 27 20 18
Volume: 96,471,872 84,127,456 85,585,496
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
XETRA DAX PF is currently 1.2% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of .GDAXI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on .GDAXI and have had this outlook for the last 0 periods.
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