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German Stock Market is Preparing for Correction

2/28/2023 12:59 PM

The leading index of the Frankfurt Stock Exchange DAX 40 is correcting, trading at around 15394.0.

The German stock market is trading at low volumes in anticipation of the publication of a block of macroeconomic statistics. First of all, the attention of investors will be drawn to the data on Unemployment Rate: it is assumed that the figure will remain at around 5.5% in January, slightly increasing the number of unemployed citizens by 9.0 thousand. In turn, the Manufacturing PMI in February may remain at the level of 46.5 points, and the volume of Retail Sales may increase by 0.2% after a decrease of 5.3% in December.

Pharmaceutical and biotechnology company Bayer AG will publish its financial results for the fourth quarter of 2022 today. Analysts expect revenue of 12.02 billion euros, up from 11.28 billion euros in the prior period, and earnings per share of 1.26 euros, after 1.13 euros in the previous quarter.

Additional support for the stock index is provided by a local decline in bond yields. 10-year bonds lose 0.37% compared to yesterday's close and 20-year ones lose 0.55%, trading at a rate of 2.632%.

The growth leaders in the index are Commerzbank AG (+4.55%), Continental AG (+3.11%), Siemens Healthineers AG (+3.05%), Deutsche Bank AG (+2.27%).

Among the leaders of the decline are Zalando SE (-0.48%), BASF SE (-0.37%), Bayer AG (-0.07%).

On the daily chart, the price is trading in an uptrend, holding within the local ascending corridor with dynamic boundaries of 16500.0–15200.0.

Technical indicators are holding a buy signal, which is gradually weakening: fast EMAs on the Alligator indicator are above the signal line, and the AO histogram in the buy zone continues to form corrective bars.

Support levels: 15200.0, 14700.0. | Resistance levels: 15600.0, 16000.0.

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