Summary of the session 21/09/2018
Friday’s session was very successful for stock bulls, the DAX index continued climbing, rising by 0.85% at the end of the day, this is the fourth such a good session in a row. This was the last session for the September contract, over the quarter DAX fell by 0.65%. On Friday, we also got readings from the Purchasing Managers’ Index from the German economy, PMI for industry slows down another month in a row to 53.7 from the forecast 55.7; for services, the reading was better and amounted to 56.5 vs 55.1.
Among the components of the DAX index, the best result was recorded by E.ON, which gained 3.64%, while SAP increased by 2.42%. The worst result was Infineon Technologies falling 1.37% and Fresenius Medical Care lost 1.20%. DAX Volatility, which measures the implied volatility of DAX options, has reached a new 3-month minimum.
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On Friday, DAX reached the described level of the monthly pivot at 12,425, this is its first test in September and so far the supply has been revealed in this place, which is why it will be an important reference point too, not only, today’s session. In the morning, the quotes start far below the price on “fixing”, which at the same time has a gigantic turnover. I would treat the approach under the direction as an opportunity for short sales. Strong support around 12,320 points.
Looking at the daily chart of the index, it can be seen that the rebound from the ‘D’ point of the external harmonic formation turned into a significant upward movement, exceeding its previous size in August. Nevertheless, to change the trend, you need to break the ‘C’ point, that is 12 600 points. In the immediate vicinity, there is also 61.8% of the abolition and 200 sessions average exponential, which may cool the buyers’ stakes. Closing the day below 12.360 points could reveal a downward formation of the evening star with a potential range of up to 12,250.