Düsseldorf The German stock market is taking a breather after a record high the day before. At the close of trading, the Dax was down 0.2 percent at 15,640 points, the third-highest closing price in its history. With the daily high of 15,727 points, the leading index was even close to the record high reached yesterday with 15,732 digits.
In Germany, investors are taking profits with automotive stocks after significant growth last week and yesterday, Monday. The corresponding industry index is down by more than one percent and is thus slightly below its record level. The shares of the three German automakers in the Dax all slipped into the red. The VW share lost more than two percent, followed by Daimler (minus 1.6 percent) and BMW (minus 0.6 percent).
A look at the daily trading volume shows that the German benchmark index is gradually entering the summer break. In the past three meetings, fewer than 50 million papers have changed hands. On Monday yesterday there were only 47 million pieces left. For comparison: the average volume on a trading day since the beginning of the year is 71 million shares.
The summer period on the stock exchange has its own laws. Because a lower trading volume can quickly lead to higher price fluctuations, because many big players are also on vacation during this time. But these higher fluctuations do not mean that the Dax will start a new, sustainable rally in this phase or that it will suddenly turn into a medium-term downtrend.
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At the latest when the institutional investors finish their vacation, things usually go in the other direction again. In many cases, after the end of the summer break, the Dax is at a similar level as at the beginning of this phase.
For the sentiment expert Stephan Heibel, who evaluates the weekly Handelsblatt survey Dax-Sentiment, “now is the time when investors can calmly adjust their portfolio to the new conditions”. His advice: Strong price gains in corona winners could be realized, while setbacks in economically sensitive industrial stocks could be used to gain entry.
Look at the individual values
Gea: A downgrade makes the stock of the plant manufacturer to create. The titles temporarily gave way by 4.5 percent and ended trading with a minus of 2.3 percent at the level of 34.29 euros. The US bank Goldman Sachs downgraded the share to “Sell” from “Neutral” and trimmed the price target to 28 euros from 32 euros previously.
Lonza: The prospect of production orders for a new Alzheimer’s drug pushed the shares of the Swiss pharmaceutical contract manufacturer Lonza to a record high on Tuesday. The shares of the Basel group rose on the Zurich stock exchange by 5.3 percent to 642.60 francs. This put Lonza at the top of both the Swiss standard values and the European health titles.
The analysts at Deutsche Bank see the approval of the Alzheimer’s drug aducanumab as a “significant catalyst” for Lonza. The demand for the drug is likely to be huge, they predicted. Lonza is big, has few direct competitors, and it is very likely that the Swiss will be able to participate in the production. Because one company alone will not be able to provide the necessary capacities.
With aducanumab, developed by the US biotechnology company Biogen and the Japanese company Eisai, the US Food and Drug Administration approved the first drug that treats the underlying cause of the nerve disease.
The corona crisis put Lonza in the spotlight in 2020. The group produces the active ingredient for the Covid-19 vaccine from the US company Moderna. With an increase in value of almost two thirds, Lonza was by far the biggest winner among the Swiss blue chips last year, but is slightly behind the leading SMI index in the current year with a price increase of a good seven percent.
Klöckner & Co.: The Duisburg steel trader is looking forward to the results of the second quarter in view of the further increase in prices for the material. This made for a clear plus for the share: The shares ended trading 7.2 percent higher than the previous day at 11.70 euros. Steel prices have risen significantly both in Europe and in the USA. The new CEO Guido Kerkhoff will present the complete report on August 10th. In this context, the other steel stocks such as Thyssen-Krupp and Salzgitter also rise.
Windeln.de: The titles of Windeln.de are experiencing a soaring flight like recently so-called “meme” shares in the USA. After their value had more than doubled the day before, they shot up on Tuesday by a good 130 percent to 5.10 euros by the end of trading. “At the end of the day, that’s gamble,” said one trader. Fundamentally, there are no reasons for the price increase.
At the weekend, the value was pushed on a website. Speculations about the tailwind from China’s swing in birth policy, on the other hand, are “pulled by the hair”. “Traders simply try to make their fortune with very small values.” Adler Modemärkte also profited from this, with stocks increasing by around a third to 1.37 euros.
In the USA, at the start of the week, the “Meme” shares had once again ignited a fireworks display. These titles, which are highly acclaimed by small investors in social networks, such as the cinema operator AMC Entertainment or the US video game retailer Gamestop, once again achieved double-digit price gains. In view of the steep rise in shares with fan communities on the Internet, the US Securities and Exchange Commission now wants to take a closer look.
Bitcoin crashes again
The most important cryptocurrency Bitcoin continues to slide. Already in the night from Monday to Tuesday it fell by ten percent to around 32,900 dollars. On Tuesday afternoon, the oldest digital currency slipped below the $ 32,000 mark. Currencies from the second and third row also lost: Ethereum, Ripple and Litecoin slide by up to ten percent.
“The price is now in immediate danger of falling below the $ 30,000 mark,” says analyst Timo Emden from the research company of the same name. That would mean a new correction low after the record high of April 13th. At that time, the cryptocurrency hit the nearly $ 65,000 mark, but then slipped to around $ 30,000 by mid-May.
In Emden’s opinion, there is still a lack of convinced buyers. This is also confirmed by the data from the website “The Block”. According to their data, the number of daily transactions in the Bitcoin network has fallen to 217,000, the lowest level since August 2018.
To put it into perspective: 2018 was a very difficult year for cyber foreign exchange. This year, the Bitcoin price slipped by more than 70 percent.
What the Dax chart technology says
Since breaking out of the two-month sideways range with 14,800 points on the lower and 15,500 points on the upper side, the technical picture has changed. The former resistance 15,500 has now become a support level. This fits the correction low since this outbreak, which was reached with 15,477 points last Thursday. This area is ideal for trading-oriented investors as a stop-loss mark.
As long as the Dax remains above this mark, the rally mode is intact and the target price of 16,200 points applies. For the calculation, the former sideways range of 700 points is added to the upside. For the technical analysts at Bank HSBC, the brands 15,764 and 15,925 points are the next milestones on the way there.
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