DAX BEARISH AFTER INDUSTRIAL PRODUCTION & FACTORY ORDERS FALL

DAX 30 is currently trading at 11937- lower by 0.38% from the last closing. The index has been continuously losing momentum since the last two trading sessions. Further back, it has closed in the negative, in 5 out of the past 6 trading sessions. The only exception was Monday when it closed in the marginally positive territory(0.10%) due to labor market holiday in the US when trading volumes were very thin..

In recent news, the Gulf state of Qatar announced on Friday that it would invest 10 billion euros to strengthen its ties with Germany over the next 5 years, including the possible creation of an LNG terminal. The head of the Qatar Investment Authority disclosed that fresh funds would facilitate additional investments in the German financial sector, as well as in promising developments in information technology, artificial intelligence, and healthcare.

Among the top losers in the DAX 30, Bayer fell by 2.18%, Deutsche Bank fell by 1.34% and Siemens fell by 0.07%. Volkswagen plunged 0.37% after news that it will be facing a trial beginning on Monday (10th Sept) in Germany as investors seek 9.2 billion euros in compensation arguing that the carmaker should have informed shareholders about a diesel pollution scandal before regulators did in September 2015.

On the economic front, German Industrial Production (MoM) for the month of July released earlier on Friday fell by 1.1% while markets expected an increase of 0.2%.In June, Production fell by 0.7%. German Factory orders(MoM) for July released on Thursday fell by 0.9% while markets expected an increase of 1.6%.

On the technical front, the RSI is currently at 28.93% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the lower band of the Bollinger Bands and is heading downwards. So, overall the market setup seems to be negative.

 

Trade Suggestion-Limit Sell at 11970. Take Profit at 11910.S top Loss at 12000.

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