Chart of the week: The Dax’s “death cross” rattles traders
Last week, Germany’s benchmark index, the Dax 30, produced a “death cross”: a widely watched technical indicator that often heralds further falls.
Last week, Germany's benchmark index, the Dax 30, produced a "death cross": a widely watched technical indicator that often heralds further falls. It occurs when the 50-day moving average of a share or index slips below the 200-day moving average.
It is apparently especially worrying when both averages are declining, as is currently the case. In the last decade there have been four death crosses in the Dax, Matthew Maley of Miller Tabak + Co told the Financial Times, "and they were all followed by significant declines".
The fundamentals aren't looking very encouraging either: Germany's heavyweight industrial and car stocks are considered to be vulnerable to further US protectionism.
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