- DAX 30 vendors reject consolidation of more than 16,000, interrupting a 5-day winning streak
- Political tensions in Afghanistan and growth problems are overshadowing equities
The DAX 30 starts a little softer on Friday a week after setting a new record, exceeding 16,000 for the first time. Weaker-than-expected data from China in the morning have set the mood this morning, as it shows that the second-largest economy is trying to continue to grow during the recovery from the COVID recession.
This morning, the mood is also being exacerbated by political tensions in Afghanistan after Taliban forces have taken control of almost the entire country, conquering the capital, Kabul, overnight. It is currently difficult to assess the impact of this situation on the markets, but as tensions deepen, it could have a negative impact on equities.
DAX 30 Everyday schedule
The question now is whether the DAX has enough steam to control the continuation or whether the uptrend has stalled since then. I must say that, despite all the uncertainties, stocks are still quite firmly higher, following the path of least resistance as the recovery trades progress. Of the last 20 daily candlesticks, only 5 are red, one of which is today and the session is still ongoing, so it now looks like a 75% positive daily closing.
Last month’s harsh withdrawal strengthened the 15,000 mark as medium-term support, where sellers need to gain momentum to break down. The withdrawal so far seems to be limited to more than 15,800, so we can see that DAX 30 will rise to more than 16,000 by the end of the week if risk reduction sentiment is not continued.
– Written by Daniela Sabin Hathorn, market analyst
Follow Daniela on Twitter @HathornSabin