Avoid stocks n that have performed weakly in the DAX.
DThe German stock index Dax has experienced a rise from 11,863 to 16,529 points since October 2022. However, since May 2023, the upward momentum has weakened and the index has been moving sideways in a technical consolidation phase. This consolidation is limited by the support zone between 15,450 and 15,600, and the resistance zone above 16,300. From a technical perspective, there are indications of a further extension of this consolidation within the current trading range.
Since the consolidation has a slightly negative impact, the Dax should implement a „mental“ (trading) stop-loss at 15,430 (slightly below the still rising 200-day and support zone) as part of risk management. On the other hand, some standard stocks show (new) technical weaknesses. As the resulting relative weakness is expected to continue in the coming months, these stocks are suitable for swap operations or liquidity procurement. Technical weaknesses with new yearly lows can be observed in Dax stocks MTU (recently with profit warning), Qiagen, RWE, and Symrise.