Stock Santa Finally Arrives to Frankfurt

Santa Claus rally is a well-known phenomenon of rising stock prices in December. In the US, Santa arrived long time ago, which currently results in new all-time highs on the American indices. To Frankfurt, Santa arrived just recently but today he is finally showing his real bullish intentions.

Let’s start from the very beginning. Since the 4th of October, DAX is above the ultra-important support on the 12900 points (orange). For the last time, it was defended on the 6^th of December and after that, the sentiment is purely bullish. Along the way to the new monthly highs, the price broke the mid-term down trendline (green) and a major horizontal resistance on the 13190 points (grey). Additionally, in the meantime, we made a small correction locked inside of the wedge pattern (red).

The new week starts on the front foot. The price is firmly heading higher. With the current momentum, we are expecting the price to test the tops from the November. Sentiment will stay positive as long as the DAX will be trading above the 13190 support. With every single day, closer to Christmas, the volatility should decrease and the stimulus from the macro calendar should be also lower. No worries though, traders should be happy enough with the fuel delivered from the technical analysis alone.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis