DAX 30 BEARISH AFTER AUTOMAKERS FAIL TO REACH AGREEMENT WITH GOVT.
DAX 100 is currently trading at 12339-lower by 0.45% as compared to the last closing. However, the index has been closing in the green over the last four trading sessions.
The U.S.-China trade war dented European stock markets on Monday after tariffs from the world’s biggest economies came into force and China canceled planned talks, triggering new fears of a protracted, costly trade dispute. European Autos and mining sectors, among the most dependent on smooth global trade, fell the furthest, down 1 to 1.2 percent.
Economy Minister Peter Altmaier said that the economy was likely to grow around 2 percent this year. That would be less than both the government’s forecast of 2.3 percent and the calendar-adjusted growth rate of 2.5 percent reached last year.
BMW and a number of German automakers fell on Monday after representatives of auto companies failed to reach a compromise with the German government on the retrofitting of diesel vehicles. German Chancellor Angela Merkel on Monday said that she would finalize a decision on diesel car retrofits on 1st October. Volkswagen fell 1.4 percent, Daimler dropped 1.86 percent and BMW dropped 2.33 percent.
Among the top losers in the DAX 30- Adidas fell 1.33%, BASF lost 0.69%, EON off 1% and RWE plunged 1.3%.
On the economic front, the German IFO index for September released earlier on Monday came in at 103.7. The index was above expectations of 103.2 with the index reading being 103.8 in August. The German Current Assessment data also out on Monday came in at 106.4. The Current Assessment reading was above expectations of 106.1 with the Assessment reading being 106.5 in August.
On the technical front, the RSI is currently at 54.09% and suggests that the market can move in the downward direction. The current price is above the MA5. The Current Price is above the middle line of the Bollinger bands but is heading downwards.
Overall Bias is Negative and short-term trades can be initiated with tight Stop Loss and Profit targets.
Trade Suggestion-Limit Sell at 12350. Take Profit at 12300. Stop Loss at 12385.