Last time we published here we said we do have some doubts about the DAX performance in November. We saw some risk but we saw also some possibilities.
The index recovered completely from the October disaster. As discussed last time we saw the possibility to go back all the way to the 9,700 line. The negative trend channel of the blue lines were not confirmed.
The popular economists of the German newspapers found of course an explanation. It was a statement of the ECB last Friday to make a QE policy like the FED did. But the above chart shows the trend change happened already at the beginning of the week. The week before it looked like the DAX would develop for the first time a lower high and would confirm a negative trend like shown by the blue trend lines. But the magnitude on Friday was may be due to the statement. In general the DAX is running the whole year to the side between 9,000 and 9,700 points. But we are confident we will see next week some reduction and the trend will go again in the direction of 9,000 points. They might take, secure the recent profit but mainly due to the long weekend in US. Who wants to be invested in these days over a long weekend. You never know what these politicians will do....Needless to say the German hobby economists forgot to mentioned that when talking about the next week.
Lets us talk about the stock we mentioned last time.
First, there is Allianz. On October 31st. the price was 126.70Euros. As of November 21st.the price is 135.85 Euros. A plus of 7.2%. The trend is strong and healthy but we might see some cashing in next week.
We also spoke about Merck. On October 31st. the price was 72.07 Euros. As of November 21st the price is 78.54 Euros. A plus of 9%. We expect some cashing in but the trend is very strong and might continue to go to the north.
Siemens was another candidate. On October 31st the price was 89.91Euros and on November 21st 93.98 Euros. A plus of 4.5%. The chart touched the 200 days line and would confirm normally a trend. But the trend is very weak. ADX shows 9.9 points. We think to take the profit is the right decision for the next week.
170.05 Euros was the price for Volkswagen on October 31st. Last Friday the share price was 177.95 Euros. A plus of 4.6%. The trend is very strong with an ADX of 44.87. We might see the paper crossing again the 200 days line to the north.
We got it wrong with Lufthansa. 13.7% increase since October 31 st is not bad at all. The trend indicator ADX is now at 29.5 points. We might see a little bit more going to the north.
November was good but as discussed at the beginning US is on holiday this week. The kids have a school break. The demand from US will be lower and we suggest to close the positions and take the profit.
But as always: just my 5 cents......
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