Dax slips below the 13,000 point mark: the main index could face a new wave of sales

Trader on the Frankfurt Stock Exchange

The hope for a calmer phase of the equity market is now out of date.

(Photo: dpa)

Dusseldorf The German stock market is down again. After a weak start, the Dax was able to stay above the 13,000 point mark in midday trading again. The daily low is 12,965 points, a drop of 2.5% or about 330 points.

Due to the price losses since the beginning of June, when the main index slipped from 14,709 to 13,007 points in a few days, the Dax is back on its downtrend since the beginning of the year. The stock market barometer had temporarily broken the trend line in mid-May. It starts with the annual high of 16,285 points in early January and builds on the other intermediate highs.

Due to the trend in May, analysts had expected a calmer phase in the equity market, but this hope is now out of date. Additionally, the stock market barometer tested the top line of this downtrend on Tuesday with a daily high of 13,444 points and then bounced south, a negative sign for further development.

For technical analyst Martin Utschneider of the private bank Donner & Reuschel, “this downward trend remains dominant”. For him, “the short-term bear market rally has now turned into an almost textbook downtrend.” This could herald a new phase of sales.

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Because a look at the development since the beginning of the year shows: after the first wave of selling from the beginning of January to the beginning of March, the Dax was able to stabilize again. But with the price losses of the last few days, the flagship index has apparently entered the third phase of the market.

Therefore, investors should focus their attention on the lower side. The first major resistance was already broken on today’s trading day. It was 13,007 points for a short time, the lowest point of the downward movement since the beginning of June and at the same time the lowest price in the last three months. Below that is the year’s low of 12,438 points, which the main index reached in early March.

Is the final stage of the Dax sale still pending?

Despite significant losses since the beginning of the year, the leading German index is still holding up well from previous bearish phases such as the bursting of the Internet bubble in 2002/03, the financial crisis in 2008 and the collapse of the crown in 2020.

According to stock exchange expert Toni Riedl, this is particularly visible on the VDax “fear barometer”, which is calculated from the expected fluctuations in the options market. The higher these values, the greater the price fluctuations that professionals expect over the next 30 days.

The V-Dax is currently hovering around a value of 30, but in panic phases on the stock market it jumps from 50 to 80. This means that while there is a lot more nervousness in the stock market, there is still no panic to be had. sale. For comparison: During the corona crash, the VDax hit a record 93.

According to Riedl, there was a sell-off phase with values ​​above 50 in the VDax at the end of the price drop in all of Dax’s major bear markets over the past few decades. “Given the mass of current problems, it would be surprising if things turned out differently this time around. One final market shake is still pending, “he says.

According to his analysis, purely mathematically, there is a risk of a setback up to about 11,500 points. According to the typical annual swings of the Dax, this decline could extend into the statistically weak months of August and September, with strong short-term swings.

Look at the individual values

BASF: Newspapers are down 5.5%. CEO Martin Brudermüller prepared investors for tough times on Tuesday. In the second half of the year, BASF will no longer benefit from its competitors’ previous supply chains and there will also be high energy costs, he said.

Bayer: Legal defeat in the United States in the herbicide glyphosate dispute continues to cause problems for Bayer. Shares were down 3.6% after falling 2.1% on Tuesday. The US Supreme Court had dismissed the pharmaceutical and agrochemical company’s appeal.

Values ​​of steel: Salzgitter newspapers hold the red lantern in the small SDax index with minus 13.7 percent. An industry study by US bank JP Morgan weighed on the route. Analyst Luke Nelson downgraded the steel company stock from “neutral” to “underweight” and lowered the target price from EUR 44.00 to EUR 31.60. He referred to significantly lower prices and declining earning power. Stocks in Europe and China are quite high and the economic outlook is poor. As a result, Thyssen-Krupp stocks also divested and fell by 9.6%. The newspapers of the steel trader Klöckner & Co. lost 7.1%.
Hugo Boss: The shares are bucking the trend with a little less than 0.2%. This morning, the British Frasers Group announced that it has recently increased its stake in the fashion firm again.

Here you can go to the page with the Dax course, here you can find the current highs and flops in the Dax.

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