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DAX PERFORMANCE-INDEX (.GDAXI) European Stocks Cling to Gains as Trump Plans Emergency Measures

DAX PERFORMANCE-INDEX (.GDAXI) European Stocks Cling to Gains as Trump Plans Emergency Measures

European equities all but gave up gains on Friday after a report that U.S. President Donald Trump plans to declare a national emergency over the virus outbreak overshadowed optimism on policy responses in Europe.

The Stoxx 600 Index ended the session with up 1.4%, after earlier rallying as much as 8.8% as Germany pledged to spend “billions” to help cushion the blow from the pandemic. Trump plans to declare a national emergency, invoking an act that will open the door to more federal aid for states and municipalities, people familiar with the matter said, before a scheduled news conference at 3 p.m. in Washington.

The Italian FTSE MIB Index was an outperformer, though it more than halved earlier gains. Germany’s DAX Index was up 0.8% after briefly erasing gains that reached 9% at one point. Travel and leisure stocks were the biggest decliners, down 2.4%, on worries over the impact of restrictions on freedom of movement on businesses.

“Until volatility starts coming down, we recommend investors maintain a cautious stance,” Alastair Pinder, a global equity strategist at HSBC Securities, said by phone. “We remain cautious on Europe and despite the sell-off, it’s not the right time to be going into buying European equities.”

European stocks plummeted the most on record on Thursday, after a U.S. travel ban and an underwhelming European Central Bank response did little to calm investors seeking a strong, coordinated effort to deal with the pandemic’s impact on global growth.

Indications from Germany that it will abandon its long-standing balanced-budget policy if necessary appeared to help sentiment earlier today, while a European Union executive said the bloc is ready to trigger a crisis clause allowing fiscal stimulus.

Among notable movers, Roche Holding AG advanced after the Swiss drugmaker won approval from the U.S. government for a highly automated coronavirus test.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 11,981.03.

The projected upper bound is: 9,968.39.

The projected lower bound is: 8,336.29.

The projected closing price is: 9,152.34.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 1 white candles and 9 black candles for a net of 8 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black 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 Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 3.7032. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 7 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 11.91. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 82 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 -145.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 14 period(s) ago.

Rex Takasugi – TD Profile

XETRA DAX PF closed up 70.950 at 9,232.080. Volume was 216% above average (trending) and Bollinger Bands were 478% wider than normal.

Open     High      Low     Close     Volume___
9,480.7809,985.7409,064.6809,232.080 325,900,896
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 10,938.99 12,870.95 12,583.10
Volatility: 84 47 28
Volume: 239,993,264 124,253,856 94,253,480

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.

Summary

XETRA DAX PF is currently 26.6% below 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 moderate flows of volume out of .GDAXI (mildly bearish). Our trend forecasting oscillators are currently bearish on .GDAXI and have had this outlook for the last 13 periods. Our momentum oscillator is currently indicating that .GDAXI is currently in an oversold condition.

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