The German Stock Index (DAX) is currently facing a possible significant correction. A Swiss asset manager predicts a similar development as in April, and this assessment is particularly relevant for private investors and retail investors. It signals a potential trend reversal after the recent rally.
Warning Signals for the End of the Rally
Four key warning signals could indicate that the DAX’s rally may soon come to an end:
False Breakout at All-Time High
Signal 1: The DAX has reached a new all-time high but has been pushed back below the breakout level. This could be a false breakout that triggers a notable counter-movement.
Correction to Key Moving Averages
Signal 2: Technical corrections to the moving averages SMA50 or SMA20 are possible. A daily close below these lines could cloud the chart and make further declines likely.
Lack of Recovery After Highs
Signal 3: Recent developments show little significant recoveries after new highs, which could indicate a phase of weakness.
Seasonalities and Sentiment Indicators
Signal 4: Various seasonal patterns and investor sentiments also suggest a potential downward movement.
Analyses show that technical corrections could already be gaining momentum. Support zones around 24,470 points as well as 23,900–24,150 points are considered significant marks. However, there are also opportunities: With better forecasts, the DAX could rise to as high as 26,000 points in a summer rally.
Conclusion: The DAX could experience a significant correction in the short term, especially if key supports are lost or sentiment worsens. Investors should pay attention to the signals and secure or adjust their positions accordingly.