Textbook Turnaround in the DAX: Gap Closed, Bulls Ignite the Afterburner!
The technical script truly couldn't have been written any better yesterday. The DAX closed the much-discussed gap with pinpoint accuracy during the course of the day, turned on a dime, and laid down an almost impressive upward run on the Frankfurt trading floor. The curious thing about it: in regular Xetra trading, there was still a razor-thin minus of 0.26% at 23,742.44 points flashing on the pricing board at the end of Monday. But anyone who called it a day too early missed the real spectacle. In after-hours trading, the German leading index picked up extremely dynamically and seamlessly caught the strong tailwind from Wall Street.
Goldman Sachs Gives Wings: Deutsche Bank and Commerzbank on the Rise
At the individual stock level, financial titles shone in particular. Driven by impressive figures from the U.S.—Goldman Sachs reported its best quarter in five full years, as expected—investors grabbed domestic financial institutions with extreme courage. Shares of Deutsche Bank recorded a strong gain of 1.4%, closely followed by Commerzbank with an increase of 1.2%. However, the undisputed daily victory in the DAX was secured by the engine manufacturer MTU Aero Engines, which shone with a solid price jump of 2.1% and profited massively from the suddenly brightening market sentiment.
Oil Shock and Bank Tremors: Will the DAX Crack the 24,250-Point Mark?
Despite this rally, a dark shadow hangs over the global economy: the price of Brent crude mercilessly climbed back above the dangerous threshold of $100 per barrel, while WTI is still trading just below it. The ongoing blockade of the Strait of Hormuz, as well as massive outages at LNG and oil facilities, reveal a deep, structural energy price problem that cannot be solved by diplomatic easing alone. Meanwhile, the U.S. earnings season continues to gather massive momentum. When giants like JPMorgan, Wells Fargo, Citigroup, and BlackRock open their books shortly, the marching orders for the entire financial sector will be redefined. From a technical perspective, the lights for the DAX are clearly on green thanks to its after-hours strength. If the index takes this bullish momentum into today, Tuesday, new highs beckon quickly. The next compelling upside price target now lies at 24,250 points.
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Forecasts are not guarantees. Rates may change. Political risk is unpredictable. Central bank actions may vary. Platforms’ tools do not guarantee success.