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DAX bulls fail to recapture 10,000 points – end of the bear market rally?

March 30, 2020 10:00

DAX

Forex Calender

Source: Economic Events March 30, 2020 - Admiral Markets' Forex Calendar

After the DAX30 CFD failed to recapture 10,000 points over the last week, and had a relatively weak weekly close, it appears that both its biggest daily gain in points (+959.42), and the third biggest last Tuesday with 10.98%, has been nothing more than a bear market rally.

Bear market rallies everywhere have been just as sharp as what we saw over the last week. In US Equity markets, the Dow Jones extended its surge to 21% in three days by Thursday, bringing it back into bull market territory, but is only relevant from a "technical" standpoint.

Overall, we stay bearish with a potential trigger of a next leg down being potentially coming from the developments around the Coronavirus, particularly in the US, and if signs of an extended shutdown of the US economy intensify.

Technically, the main focus in the DAX30 CFD lies in the region around 9,150/200 points, where a sustainable break lower could trigger a next wave of selling down to 8,000 points and even lower in the days to come.

Above 9,150/200 points, another push up to and above 10,000 points stays on the table with a break above the pre-weekly highs around 10,150 points levelling the path to a deeper corrective move (still a bear market rally in the higher Daily time-frames) and bringing the mark around 11,000 points back into play.

Hourly chart

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Hourly chart (between March 11, 2020, to March 27, 2020). Accessed: March 27, 2020, at 10:00pm GMT

Daily chart

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Daily chart (between December 7, 2018, to March 27, 2020). Accessed: March 27, 2020, at 10:00pm GMT - Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the DAX30 CFD increased by 9.56%, in 2016, it increased by 6.87%, in 2017, it increased by 12.51%, in 2018, it fell by 18.26%, in 2019, it increased by 26.44% meaning that after five years, it was up by 34.2%.

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