As anticipated in our technical research piece for the DAX30 CFD last Wednesday where we pointed out “[…]another attempt to break above 11,000 points in the DAX30 CFD seems likely in the coming days.[…]”, on Friday the break finally occurred. In review of the price action, it seems as if the squeeze higher was a combination of the technical relevance of the region around 10,970/11,000 points, and the hedging taking place shortly before, and in regards to the expiration of January-options in the FDAX at the EUREX.
The question heading into the start of the week now is whether this move was sustainable or not. If the DAX30 CFD initiates a corrective move, the breakout region around 10,970/11,000 points now acts as a solid region of support against which long-engagements look interesting, from a risk-reward perspective. In general, the short-term picture in the hourly-chart in the DAX30 CFD remains positive as long as we trade above 10,800 points, but with the squeeze heading into the region around 11,250/300 points, the risk-reward-ratio for long-engagements (also on the lower time-frames) becomes a little unattractive:
Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD hourly chart (between 28 December 2018 to 18 January 2019). Accessed: 18 January 2019 at 10:00 PM GMT – Please note: Past performance is not a reliable indicator of future results, or future performance – In 2014, the value of the DAX30 CFD increased by 2.65%, in 2015, it increased by 9.56%, in 2016 it increased by 6.87%, in 2017 it increased by 12.51%, in 2018 it fell by 18.26%, meaning that after five years, it was up by 10.5%
Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
- Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
- To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
- The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
- Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.