Goodbye DAX30, Hello DAX40!
As with every third Friday of each month, today is a special day due to the expiration of options and futures contracts in the financial markets. This Friday is especially important since, being the ninth month of the year, not only will monthly contracts expire but also quarterly contracts. So, during today's session we will witness what is popularly known as the “quadruple witching hour”.
However, without a doubt, the main focus of the day, and what today's session will be remembered for, is the end of the popular DAX30 index. As announced several months ago, from Monday 20 September, the German index will be trading with 40 companies, thus becoming the DAX40. "The king is dead, long live the king!”
As we announced just a few days ago, the following companies will be joining the existing 30 in the index:
- Airbus SE
- Zalando SE
- Siemens Healthineers AG
- Symrise AG
- HelloFresh SE
- Sartorius AG Vz
- Porsche Automobil Holding
- Brenntag SE
- Puma SE
- Qiagen N.V.
Their admission into this important index is no trivial event. The companies may experience high volatility over the next few sessions due to the fact that the funds and ETFs which track this index will have to acquire shares of these companies and readjust their holdings to match the composition of the new index. It will, therefore, be interesting to monitor these companies over the coming days.
It seems that the DAX30 is going to say goodbye to its old format by facing its 18-session moving average in white, with its important support/resistance level represented by the orange band. It is important for the price to break this level in order to gain momentum in search of the downtrend line that began in mid-August after making record highs, since as long as the price is not able to overcome this trend line the sentiment will remain negative.
On the contrary, a failure to break above its current resistance level could trigger a bearish rebound in search of its monthly lows. The loss of this level could lead the price to look for its important support level at 15,300 points represented by the upper red band.
Evolution of the last five years:
- 2020: 3.6%
- 2019: 25.48%
- 2018: -18.26%
- 2017: 12.51%
- 2016: 6.87%
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