The DAX index is trading at new record-highs today despite reports that the coronavirus has now infected 300 people. Germany’s stock index tapped a new peak at 13,639.65 in today’s European open before settling at 13,625.95. Along with is Asian counterparts, it would seem that the DAX index is benefitting from news that China has committed to taking steps to contain the coronavirus. The market reaction is also not surprising. In 2003, stock markets quickly rebounded from their lows triggered by the SARS outbreak.
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It may have also helped that data from Germany topped forecasts yesterday. The German ZEW Economic Sentiment report came in higher at 26.7 for January than the 15.2 forecast. This suggests that investors have grown more optimistic about economic conditions this month. The reading is also higher than December’s reading at 11.2.
Gains are being led by German semiconductor manufacturer Infineon. Its stock is up by 1.19%. Trailing behind it is BMW at 1.18%. The third-best performer is Daimler at 1.08%. On the other hand, the worst-performing stock so far is MTU Aero Engines which is down by -0.35%.
On the hourly chart of DAX Index CFD, we can see that the stock index has retraced some of its gains back to the 23.6% Fib level (drawing the Fibonacci retracement tool from yesterday’s low to today’s high). It has some room to move lower to 13,515.0 where the rising trend line (from connecting the lows of January 16 and January 21) coincides with the 100 SMA and 200 SMA.
However, it’s worth noting that the DAX Index is also trading at its previous highs. Reversal candles at this level could mean that it could soon trade to 13,639.65.