The start of the new trading week for the DAX was sluggish. The index closed with a tiny gain of 0.08 percent at 24,307.80 points. This inactive trading can largely be attributed to the upcoming quarterly reports from several DAX companies throughout the week. These reports are expected to provide further insights into the economic health of Germany's top corporations, and it's possible that some disappointments, particularly in their outlooks, might be included. The third quarter is often known as the most challenging quarter of the business year for companies, which further explains investor caution.
Harbinger of a Weak Summer? DAX Faces Seasonal Headwinds
This cautious stance could be a precursor to the typical summer seasonality, which is most pronounced in August and September. On average, over the last 20 years, the DAX has not delivered a positive performance in these two summer months. While August has yielded an average negative return of 1.4 percent over the past two decades, September has managed a "black zero," but it still ranks as the third weakest stock market month when measured over the last 20 years, alongside June and August. These historical patterns signal caution and could indicate an impending breather for the market.
Among individual stocks, BASF, E.ON, and Vonovia recently shone, taking the top spots. BASF gained 2.3 percent, while E.ON and Vonovia each saw a 1.9 percent price increase. At the bottom of the list was Fresenius, which had to absorb a 1.6 percent loss.
Can the DAX Maintain Its Uptrend? Watching Key Support Levels!
For the upcoming trading days, it will be crucial whether the support levels from recent trading days, around the respective daily lows, can hold. The short-term technical indication of the slow stochastic is currently leaning towards the south, without giving a clear signal, while the overall market trend is still assessed as a buy. This creates a tricky situation for investors that needs to be resolved.
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