DE30 buy

Trading on the Two Anomalies of the German Stock Market

19 july 2022 87
Elena_Berseneva
Elena_Berseneva

Listed among the best MarketCheese authors
1st in the segments "Indices", "US stocks" and "Metals"
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Two weeks till the end of July mean the occurrence of another chance to get profit with the German stock market index DAX, French index CAC 40, and Japanese index Nikkei 225, which have shown the average growth from 0,3% exactly in the latter half of the month. The latter half of May, as an example, justified itself by the growth of the DAX index by 2,6%.

 

Today let’s focus on it.

 

For a month since June the DAX has lost 14% and turned to correction. Now the index is trading around the Fibonacci retracements of 23,6%. Usually, the correction movement reaches the levels of 38,2%, 50%, and 61,8%.

 

On July 26 the turn-of-the-month effect will join the half-of-the-month effect. The research has shown that the peak of profitability for the DAX index occurs with the entry on the market within the opening of the trading day 6 days before the end of the month and the exit with the end of the 3rd trading day in the beginning of the next month.

 

 

What trading options are possible in anticipation of the growth in the latter half of July and inclusion of the turn-of-the-month effect?

 

1. Buy the index for the current price. The target Take Profit 1 and Take Profit 2 orders can be 13250 and 13540, correspondingly. The Stop Loss order under 12700 can limit the loss. The position can be closed at the end of the trading day on July 29.

 

2. Buy when the price decreases to 12710. Then the target Take Profit 1, Take Profit 2, and Take Profit 3 orders can be 12920, 13250, and 13540, correspondingly. The Stop Loss order under 12500 can limit the loss. The position can be closed at the end of the trading day on July 29 as well.

 

3. Buy or add positions within the opening of the trading day on July 26. The target orders can be settled on the same levels as in the first two options. The Stop Loss order - under 12500. The part of positions can be closed at the end of the trading day on July 29, and the remainder - at the of the trading day on August 3.

 


Bear in mind the spread and rules of capital management!


 

Risk disclosure!

Trading on financial markets is conjugated with a high level of risks that can cause the investment capital loss. The MarketCheese team is not responsible and assumes no liability for a possible loss of your investments.

Elena_Berseneva
Elena_Berseneva

Listed among the best MarketCheese authors
1st in the segments "Indices", "US stocks" and "Metals"
2nd in the segment "Currencies"
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