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DAX: Level at 10,000 in the focus

Due to the crash on the Chinese equities markets the DAX has been under heavy pressure.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
bg_dax_1369829
Source: Bloomberg

The technical situation of the German stock market has been worsened. Following the losses in the recent weeks one important support is now in focus.

Let’s have a look at the big picture on monthly basis. Bulls and bears are fighting for the psychological price level at 10,000. For the further development a closing price above the mentioned support at the end of this month would be very important. Investors could use this relatively low price level to buy German blue chips.

The midterm upward trend line at 10,420 would be the first technical target. This trend line was broken down. After that the DAX could continue the recovery in direction of the psychological level at 11,000.

The breadth of market leaves something to be desired. Currently only three of thirty shares of the German stock market are trading above the 200 days moving average (SMA). On the one hand it means a relative weakness of the market. Then again it shows an oversold situation.

Below the support at 10,000 the DAX would generate a sell signal. In this worst-case scenario the upper limit of the former trading zone at 9,000 could be the target.

German stock market DAX on monthly basis

DEM_DAXUpdate_310815
Source: IG charts

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.