DAX Index Hangs on to Support; Can It Bounce Back Up?
Just like most of its counterparts yesterday, the DAX Index traded in the red. Germany’s stock index closed with a 4.01% or 544.090-point loss at 13,035.240.
All of the thirty stocks tracked by the index incurred losses. They were led by the airline company Lufthansa which sustained an 8.81% loss. News about the coronavirus spreading outside of China worried investors that travel would soon be banned in certain places. In fact, some airlines have already suspended flights to some provinces in South Korea as the country reported a spike in coronavirus cases.
The Hang Seng Index is already trading higher today as concerns about the coronavirus wane. Will the DAX Index also be able to pare some of its losses?
On the 4-hour time frame, we can see that the DAX Index found support at its previous lows around 12,970.0. If there are enough buyers in the next few days of trading, we could see the stock index trade higher to the 61.8% Fib level (when you draw the Fibonacci retracement tool from the high of February 20 to the low of February 24). This price also coincides with the 100 SMA and 200 SMA.
On the other hand, if sellers continue to dominate trading, we may finally see a break of support at 12,970.0. If this happens, the DAX Index could fall to 12,620.6 where it peaked on July 2, 2019.