DAX closes within previous day's range
DAX Performance-Index (DAX) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DAX ended the week -4.86% lower at 11523.81 after edging lower €15.54 (-0.13%) today. Today's close at 11523.81 marks the lowest recorded closing price since February 6, 2017. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (DAX as at Oct 12, 2018):
Friday's trading range has been €179.29 (1.53%), that's above the last trading month's daily average range of €133.25. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for DAX.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on Wednesday, DAX lost -1.48% on the following trading day.
After having been unable to move lower than 11518.56 in the previous session, the market found buyers again around the same price level today at 11514.55.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 12141.56.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
2017's low at 11414.82 is within reach and we might see further downside momentum should the index break out beyond.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "52 Week Low" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for DAX. Out of 28 times, DAX closed higher 53.57% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 78.57% with an average market move of 4.02%.
With three out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are CAC losing -0.2% and FTSE closing -0.16% lower. On the flipside the best performers have been TECDAX closing 1.47% higher and BEL20 gaining 0.06%. Read more