DAX ETF Wipes Out Strong Weekly Gains in Shock After-Hours Plunge

It was a tale of two markets for the Global X DAX Germany ETF (NASDAQ: DAX) this past week. During regular trading hours, the fund, which tracks Germany’s benchmark stock index, posted a stellar rally of over 2.5%. However, a dramatic and unexpected sell-off in after-hours trading on Friday completely erased those gains, leaving investors on edge for the week ahead.

The ETF officially closed Friday’s session nearly flat at $44.90 USD. But the real story unfolded after the bell, when a wave of selling pressure dragged the price down a staggering -4.34% to $42.95 in the after-hours market, a move that stunned market watchers and reversed the week’s bullish narrative in an instant.

A Bullish Week in Regular Trading

Before the evening drama, the week had been a clear victory for the bulls. The DAX ETF, a proxy for Germany’s powerhouse industrial and automotive economy, marched steadily higher, reflecting broad optimism in European markets.

• The week began with a solid start, climbing from a close of $43.79 on Monday to build momentum each day.
• By Wednesday, the ETF had pushed decisively past the $44 mark, closing at $44.42.
• The rally peaked on Thursday, with the ETF closing at $44.91, its highest point of the week.

This steady climb brought the fund within striking distance of its 52-week high of $46.08. The price action throughout the week suggested strong investor confidence in Germany’s export-driven economy and the profitability of its leading blue-chip corporations. The sentiment was overwhelmingly positive, with the ETF on a clear path to test its yearly highs.

The After-Hours Shockwave

The positive narrative shattered minutes after the market’s close on Friday. The sudden 4.34% plunge in the after-hours session is a significant red flag, suggesting that major, market-moving news was released after the official close of both the German and U.S. stock exchanges.

While the specific catalyst is not yet clear, after-hours drops of this magnitude are typically driven by unexpected events such as:

• A major German company issuing a surprise profit warning or negative guidance.
• Unfavorable geopolitical news impacting European trade.
• A sudden, negative development concerning the European Central Bank’s policy or the health of the German economy.

This sell-off effectively wiped out the entire week’s rally, pulling the ETF’s value back below where it started on Monday. It transformed a story of bullish strength into one of abrupt fear and uncertainty.

Technical Picture Instantly Redrawn

The after-hours plunge completely redrew the technical map for the DAX ETF. What was a bullish picture of an asset testing its 52-week high has now become a bearish one of a broken trend.

The ETF has now sliced through all the support levels it established during its climb last week. The key question is no longer whether it can break its yearly high, but where it will find support when the market opens on Monday. The focus will be on whether the price can hold above the low $43s or if the selling pressure will intensify.

In conclusion, a week that looked like a resounding success for German equities ended on a note of extreme caution. All eyes will now be on the market open on Monday to see if the after-hours panic was a knee-jerk overreaction or the start of a more significant downturn.