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German stocks in the price. The trend is changing on the DAX 40

German stocks in the price. The trend is changing on the DAX 40

created Marcin KiepasNovember 8 2022

The first half of the second week of November is marked by increases on the German stock market. On Tuesday, the DAX 40 index climbed to 13572,25 points, continuing the increase from Monday and the dynamic jump from Friday, as well as in line with the entire growth impulse observed on this chart since the first days of October.

DAX 40 comes out of the bear market?

The last 5 weeks were marked by increases in DE40 (CFD on DAX 40). The demand attack on the local highs from the first half of September this year, observed since yesterday. (13566,15 points), or rather the lack of clearly active supply below this resistance, is another confirmation of this. It is another demand signal.

DE40 cfd to dax 40 Daily_08112022

DE40 daily chart (CFD on DAX 40). Source: Tickmill

The beginning of October brought a return on the DE40 (D) chart from around 11800 points, after the chart broke the strong support zone of 12384,75-12432,45 points in the second half of September, created by the lows in March and July this year. The breakout itself turned out to be a bear trap. With problems, but nevertheless the DE40 returned to the above-described barrier. It was the first major defeat of relegation players.

What happened at the end of October, however, hardly anyone expected. The daily DE40 chart broke above the bearish line following the peaks in January, June and August this year. As a result, the trend changed to an upward trend then. This change was undoubtedly confirmed by the demand signals on the indicators (e.g. on MACD).

Last week, the change from downward to upward trend was additionally confirmed by the successful defense of the 10-month bearish line that had been broken earlier. The DE40 chart then made a classic return move to this line to bounce back dynamically last Friday and move up.

What are the forecasts?

The next step in gaining control of the market by the demand side will be a permanent breakthrough of the resistance under attack at 13566,15) points, which will also mean negating the structure of lower and lower peaks on the DE40 chart. Then the road towards 15000 points will be opened, and any potential drops will be treated by the market as technical corrections.

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About the Author
Marcin Kiepas
Tickmill UK analyst. Financial markets analyst with 20-year experience, publishing in Polish financial media. He specializes in the foreign exchange market, Polish stock market and macroeconomic data. In his analyzes he combines technical and fundamental analysis. Looking for medium-term trends, examining the impact of macroeconomic data, central banks and geopolitical events on the financial markets.

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