Madness on the Trading Floor: Brilliant Thrust Reversal Catapults DAX Above 24,400 Points!
The German leading index is currently absolutely not for the faint of heart! Market participants must display extreme mental flexibility to survive this unpredictable zigzag course unscathed. After the DAX brutally wiped out all of the previous week's gains on Monday, Tuesday was all about a massive thrust reversal. The index ignited a massive liberating blow of 1.71% and sovereignly ended Xetra trading at 24,401.70 points. The market psychology behind this is remarkable: What was still considered a fatal escalation peak on Monday is gradually being priced in as the "new normal" on the trading floor. The fact that U.S. forces have now actively launched the military operation to open the Strait of Hormuz allowed overheated oil prices to cool noticeably—a perfect assist that investors gratefully used for aggressive entry!
Continental Strikes Back—Infineon Ignites the Historic 100-Percent Rally!
At the individual stock level, a real comeback drama unfolded on Tuesday: The Continental share, which had been mercilessly punished on Monday, rehabilitated itself impressively and sensationally secured the daily victory with a premium of 1.9%. Close on its heels followed Scout24 (+1.8%), which once again massively benefited from its shortened share buyback program. The real show, however, is currently being put on by Infineon (+1.6%): The semiconductor giant has been putting on a breathtaking sprint on the trading floor since April. With an unbelievable performance of 45.4%, the stock is the undisputed leader of the 3-month ranking in the DAX and has now even broken through the magic 100-percent mark year-over-year!
Run-Away Gap Expected: Is the Direct March to 25,000 Points Starting Now?
From a technical perspective, the bulls have the wheel firmly in their hands again; the next big target of 25,000 points is inevitably moving into focus. Today, Wednesday, everything in the pre-market points to an opening with a strong upward gap. Since this price gap is forming directly following yesterday's recovery, it could be a textbook "run-away gap" (continuation gap) that will not be closed for the time being—an extremely strong technical buy signal! Macroeconomically, attention inevitably turns to the U.S. in the afternoon at 2:15 PM CET. The private payroll service provider ADP is publishing its red-hot labor market data. Even though these historically often deviate from the official labor market report, they regularly guarantee fierce and lightning-fast bursts of volatility on the stock market!
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.