Investment Idea

DAX Market Review, September 2018

06/09/2018 | 2 min read

Last month the DAX index was under selling pressure and ended the month at 12364 which is -3,36% lower than the prveious month.

DAX Market Review, September 2018

Last month the DAX index was under selling pressure and ended the month at 12364 which is -3,36% lower than the previous month. DAX is currently both under EMA6 and EMA12. EMA6 is however above EMA12, that is, the trend is still up measured with this tool. Both averages are flat which indicates the index is in no trend currently but in a large range. DAX is also still in a longer term rising channel and the bottom of the channel is about 11800 currently.

First more important support is at 12000 and the first resistance is at 12850. It would be a bearish sign, if the index closed below 12000 because this could trigger a bigger decline since the index has not closed below 12000 on a monthly basis this year.

Long-term support levels: 12000, 10600, 9900, 9000
Long-term resistance levels: 12850, 13500

The weekly chart, the mid term time frame, DAX is still in a rising channel but inside that channel, there is another declining channel building. Also moving averages (EMA6 & EMA12) is pointing south at the same time DAX is testing the bottom of the channel. There have been more declining weeks lately but advancing weeks have been about as powerful as decliners. DAX is currently seeking direction and it is likely, that during the coming weeks DAX will move away from the range and into a trend.

There is uncertainty in the index and many underlying stocks are under pressure. Technically DAX have made a series of lower highs but not yet lower lows. The chart also reminds more of a head and shoulders price pattern which is a bearish pattern. Historically DAX has performed good over the next weeks, it will be interesting to see what the near term future brings on.

Support levels: 12150, 11900
Resistance levels: 12500, 12850, 13150, 13500

Since 1997, median performance for this mont +0,5% but there has been some bigger declines which makes the average performance at almost -2%.

Summary of underlying technical indicators


Underlying stocks in the index since YTD. Financial sector stocks are still under pressure and Adidas, Deutsche Börse and RWE have been performed the best.

DAX underlying total DMA20, the more part above its DMA20 which is bullish.

McClellan above 0 and a positive divergence, bullish sign.

Historically seasonality still mostly selling.

Upcoming weeks mostly ended in green. Note though that there have been some big declines also during this period.

Upcoming week median and average return.