DAX analysis: dynamic uptrend with resistance at 19,685 points

DAX analysis: dynamic uptrend with resistance at 19,685 points

The DAX is still in a dynamic uptrend and reached new highs on 17 October. Since then, a slight consolidation has been taking place in the range between the EMA 20 and the all-time high in order to reduce the overbought market situation. There is a possibility that this breather will give the index new impetus for a further upward trend and steer it towards the upper Bollinger band.

DAX - Technical Analysis

The current uptrend is supported by the buy signals of the moving averages 20, 50, and 200 which act as dynamic resistance.

Stochastic RSI: The Slow Stochastics are currently in the oversold area. If the oscillator's blue signal line remains above the red line and then moves upwards, this could indicate a bullish scenario.

There is a possibility that the DAX will again head for the highs of 17 October at 19,685 points.

A breakout above this resistance would trigger a buy signal and possibly stimulate follow-up purchases up to the psychological barrier of 19,800 points.

Important market data:

Today, investors are focusing on the labour market data and the consumer price index for Germany. The gross domestic product (GDP) for the third quarter will also be published, which could provide additional impetus.

Outlook:

The long scenario remains intact as long as the DAX does not fall below the 19,308 point mark.

The picture for the DAX is mixed at the moment, with a slight tendency towards weakness in the short term. Should the index break through the important support levels, short-term corrections could follow. A rise above the current resistance levels, on the other hand, could trigger a recovery. Traders should follow developments closely and watch for possible breakouts or support breaches.

BASF faces difficulties ahead of quarterly figures

The figures for the third quarter of the world's largest chemical company, BASF (ETR: BASFN), will be announced on Wednesday. Low capacity utilisation at the main plant in Ludwigshafen, rising energy prices and high cost pressure are currently challenges for the DAX-listed company. In response, management has announced a comprehensive restructuring of the company, which could include potential plant closures and additional job cuts, particularly at the Ludwigshafen site.

At 9 a.m., Chief Financial Officer Dirk Elvermann and CEO Markus Kamieth will explain in a conference call the impact that the ongoing cost-cutting measures and the weak economy have had on the company.

Excluding interest, taxes, depreciation and amortisation (EBITDA) and special items, BASF is aiming for a result of EUR 8.0 to 8.6 billion for the year as a whole, compared with EUR 7.7 billion in the previous year. So far, there are no sales and net profit forecasts. In the third quarter of last year, BASF posted sales of €15.7 billion and earnings before interest, taxes, depreciation and amortisation of €575 million. However, the company had a loss of €249 million.

A new challenge for BASF?

It is possible that BASF, the long-standing industry leader, faces further problems due to ongoing economic uncertainty and internal problems.