- Summary:
- The DAX indexe rose by 3% as the market reacted to new Coronavirus data from Europe. But, the jump could be a dead cat bounce and not the start of a rally
The DAX index rose as investors welcomed signs that the COVID-19 pandemic was peaking in some parts of Europe. The index rose by more than 3.57% index. Other indices in Europe, including the FTSE 100, CAC, and Stoxx 40 rose by more than 3%.
The biggest gainer in the index was MTA Aero, which rose by more than 8%. It was followed by Volkswagen, Daimler, Continental, and BMW, which gained by more than 5%. The worst performer was Vonovia, E.On, and Merk.
Still, there are questions about whether the current Coronavirus trends in Europe will continue. The risk is that the disease could start spreading again after the current lockdowns stop. This is made worse by the fact that the disease does not have a cure yet.
Meanwhile, investors are also concerned about the health of European companies. In a report yesterday, the auto sector is expected to experience significant pains. The report expected that auto companies could lose as much as $100 billion in lost revenue this year. Europe is expected to lose more than 2.6 million cars worth more than 66 billion euros.
The stocks also rose after a report said that Russia and Saudi Arabia were inching closer to a deal as we reported earlier today.
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DAX Index Technical Analysis
The DAX index rose by more than 3% today. The index rose to a high of €9,945, which was higher than Friday’s close of €9526. Looking at the four-hour chart, we see that the index has been moving sideways in the past few trading sessions. We also see that the index is attempting to test the important 38.2% Fibonacci Retracement level. These movements tell us that a new trend has not yet formed, which is a sign that the bounce could be short-lived. Such a trend is known as a dead cat bounce. The key levels to watch will be the resistance and support levels of €10,100 and €9295 respectively.