DAX: Important support with no chance

Last week saw a focus on the important support at 8982/8952. But this trend line had no chance and was broken down. 

Source: Bloomberg

The German stock market has generated a new sell signal. Nevertheless the long-term upward trend is intact.

We see the long-term chart on monthly basis. On this time level the DAX is trading below the mentioned support. The next important support is at 8132/8152. These are the highs of the years 2000 and 2007. Regarding the new sell signal a test of this former resistance is possible.

On the long-term basis (“Big Picture”) the DAX is trading in an intact upward trend channel. Below the lower trend channel trend line at 7700 the bull market would be over. But this is currently a rather improbable scenario.

Regarding the price losses in the most recent week the German stock market is now oversold. A short-term recovery to the former support at 8982/8952 is possible.   

German stock market DAX on monthly basis

IG Charts

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.