Dow, Nasdaq and DAX recover slightly but virus fears persist
DAX retail bias shifts back to majority short, Dow and Nasdaq short bias rises.
Dow Technical analysis, overview, strategies, and levels
It was somewhat of a mixed session for the Dow, where Disney share prices were near the top ahead of its earnings release today with investors keen to see how its streaming service has fared, and likely to affect other streaming companies. At the bottom were energy giants’ ExxonMobil and Chevron, no surprise given the recent oil price plummet as the energy sector registered a significant contraction, while materials and tech outperformed as a sector. Coronavirus fears continue to persist in the background, and hence it’s a question of whether contrarian breakout strategies will outperform should any fresh updates emerge on that front.
IG client* and CoT sentiment for Dow
As for retail bias, it was at a slight majority short 53% yesterday after dropping significantly as shorts got out on Friday, and as of today morning stands at a majority short 60% following the slight retracement back up.
Dow chart with retail and institutional sentiment
Nasdaq Technical analysis, overview, strategies, and levels
While Disney isn't a component of Nasdaq, its results today may affect streaming companies' share prices like that of Netflix depending on the results, with the latter amongst the outperformers yesterday but nowhere near matching that of Tesla’s which registered fresh record highs following a 20% increase in its share price. Technical overview remains more bullish than that of the Dow in the short and long-term, with the main daily technicals still showing positive technical bias. Google’s (Alphabet) earnings while better than expected showed a slight miss in revenue, and its share price has been dropping in after hours.
IG client* and CoT sentiment for Nasdaq
As with the Dow, retail bias here has also risen, to a heavy short 71% and awaiting a significant retracement back down in order for averaged-in shorts to unwind in profit.
Nasdaq chart with retail and institutional sentiment
DAX Technical analysis, overview, strategies, and levels
While the DAX finished in the green with SAP outperforming as well as Lufthansa recovering from what has been a big dent in airline stocks and the travel industry, there were still components at the bottom which included Deutsche Bank. From a technical standpoint both daily and weekly are more consolidatory, with long-term positive technical bias but conflicting with short-term negative pressures, and where affects of the coronavirus have dictated risk-related flows.
IG client and CoT sentiment* for DAX
Retail bias here has shifted from yesterday’s slight majority long 52% to a majority short 55% as of today morning, but expect range-trading to continue in the German index.
DAX chart with retail and institutional sentiment
* The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%.
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