Is the post-election DAX30 bull run only a technical reaction or is there more?

November 09, 2020 10:30

Source: Economic Events November 09, 2020 - Admiral Markets Forex Calendar

With intensifying signs that Joe Biden has won the US presidential election (we are considering the fact that legal action threats from the Trump Administration may delay the final decision here), equities and, thus, the German DAX30 saw surprising strength into the last weekly close.

In our opinion, the strong bullish push back to above 12,000 points is most likely a combination of:

  • Decreasing fears due to uncertainty around who will finally win the presidential race
  • Fund managers piling back into the market and heavily buying Equities in anticipation of a massive fiscal package from the new US government to stabilize the tumbling US economy

Technically, the run in the DAX30 perfectly fits our take from last Monday, in which we wrote:

[…] Still, we should not forget the US presidential election Tuesday/Wednesday will probably "re-shuffle the deck" and if, for whatever reason, the DAX30 recaptures 11,650/700 points a deep run back above 12,000 points could be the result, technically resulting in a re-test of the neckline of the Head- shoulder formation on a daily time-frame […]

That move can clearly be seen now when looking at the DAX30 daily chart. What remains to be seen is if we will get to see a bounce here and, respectively, how strong the bounce will be.

Dropping back below 12,270/300 points would leave the German index vulnerable to another stint down to 12,000 points, probably even lower in the days to come. A first target can be found around the US presidential election lows around 11,770/800 points.

If bulls, on the other hand, remain in control and push the DAX30 above 12,600 points, a continued run up to 12,700 points or possibly even above 13,000 points, will become an option:

Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD Hourly chart (from October 19, 2020, to November 06, 2020). Accessed: November 06, 2020, at 10:00 PM GMT

Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD Daily chart (from June 17, 2019, to November 06, 2020). Accessed: November 06, 2020, at 10:00 PM 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%, and in 2019, it increased by 26.44%, meaning that in five years, it was up by 34.2%.

Check out Admiral Markets' most competitive conditions on the DAX30 CFD and start trading on the DAX30 CFD with a low 0.8 point spread offering during the main Xetra trading hours.

Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level than with MetaTrader 4. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modelled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
  9. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.
Admirals Eine Komplettlösung für das Bezahlen, Investieren und Verwalten Ihres Geldes

Admirals ist mehr als ein Broker. Wir sind der Dreh-und Angelpunkt für Ihre Finanzen, indem wir Ihnen eine breite Palette von Finanzprodukten und -dienstleistungen anbieten. Wir machen es möglich, persönliche Finanzen durch eine Komplettlösung für das Investieren, Ausgeben und Verwalten von Geld anzugehen.