DAX PERFORMANCE-INDEX (.GDAXI) Drops 0.8% But Bullish Trend Remains
The Dax is trading 0.8% lower heading into the afternoon around session lows. Risk sentiment has taken a hit amid growing signs of the strains that coronavirus is having, not just on the Chinese economy but the global economy.
Apple warns on profits
Apple, considered one of the best bellwethers for the coronavirus impact, warned that their profits could miss expectations owing to low production levels and slow Chinese consumption. China is a big market for Apple, accounting for around one sixth of its global revenues and the source of most of its products. With this in mind, the impact is both on supply and demand. The warning from Apple has served as a reality to check to the financial markets, which had so far been assuming that any impact from coronavirus will be short lived.
German ZEW Sentiment Index Drops
Also dampening the mood for the Dax was today’s German ZEW index for February. The Sentiment Index tanked to 8.7 from 26.6, significantly short of the 21.5 analysts forecast. Investment sentiment has dropped sharply as the effect of the coronavirus outbreak weighed on exporters, painting an increasingly gloomy picture for Europe’s largest economy.
The hit to sentiment comes following a poor run of data from Germany, with economic growth stagnating, and the manufacturing sector suffering its worst year for a decade last year, following a sharp fall in orders.
Dax levels to watch:
Despite falling over 100 points today, the DAX remains in an uptrend. A break below 13445 (Feb 10 low & 100 & 50 sma approx.) could negate the current uptrend. This could open the doors to 13320 (200 sma) and eventually 12970.
On the flip side immediate resistance can be seen at 13731 (today’s high) prior to 13795 (all time high).
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 13,262.21.
The projected upper bound is: 14,038.01.
The projected lower bound is: 13,352.05.
The projected closing price is: 13,695.03.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 5 falling windows in the last 50 candles–this makes the current falling window even more bearish.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 78.7519. This is not an overbought or oversold reading. The last signal was a sell 0 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 58.26. 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 64 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 66. This is not a topping or bottoming area. The last signal was a sell 0 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 buy 8 period(s) ago.
Rex Takasugi – TD Profile
XETRA DAX PF closed down -102.699 at 13,681.190. Volume was 3% above average (neutral) and Bollinger Bands were 44% wider than normal.
Open High Low Close Volume___
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 13,639.33 13,367.94 12,603.52
Volatility: 13 16 17
Volume: 85,989,264 78,789,736 85,439,008
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 gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
XETRA DAX PF is currently 8.6% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of .GDAXI at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on .GDAXI and have had this outlook for the last 5 periods.