The German DAX 30 index has been moving higher this morning at the open, but so have all the European equities. It would seem that the positive atmosphere originating from the U.S. session in the overnight hours of the trading day. This doesn’t necessarily come as big news to most people, due to the U.S. Midterms Elections, investors are wary and somewhat optimistic about the way things are going.
Over the past 10 days, the German index has been moving upward after hitting a low of 11,040 creating a triple bottom establishing a solid support for the index to bounce from, and that is what it did. The index managed to rally higher reaching towards the 76.4% Fibonacci retracement level at 11,650 before tempering down a bit. The mentioned Fibonacci retracement connects the high of 11,837 on October 17th and the low of 11,040 on October 26th.
The Index seemed to be able to break above most of the Fibonacci retracement levels which included the 23.6%, 38.2%, 50.0%, and the 61.8%, only to be held at the 76.4% as mentioned before forcing the index to move back below the 61.8% and below the 11,530 level. The index has broken below the 50-Hour Moving Average as the 50.0% Fibonacci level at 11,435 level coinciding with the 200-Hour Moving Average which gives some strength to the level and its ability to keep the index in check from falling below the 50.0% Fibonacci level.
The 40-level on the RSI is the benchmark that sets a downward momentum on the index, and most conveniently, it is corresponding to the 50.0% Fibonacci level and the 200-Hour Moving Average (Red Line). This ties in pretty nicely in technical analysis as it gives the 11,435 much power and importance as 3 indicators are pointing that it contains the power to eventually shape the future of the index from a technical viewpoint. However, let us not forget that there are the Midterm Elections that will have an effect on the equities worldwide if Democrats take both houses or the Republicans retain their current control.
Currently, the best performers on the DAX 30 are Deutsche Post (+3.04% at €28.77); Wirecard (+1.18% at €152.73); and Covestro (+0.95% at €59.22). The worst performers are E.ON (-2.46% at €8.53); Infineon (-1.38% at €17.60); and Continental (-0.83% at €143.35).