DAX breaks below Wednesday's low
DAX Performance-Index (DAX) Technical Analysis Report for Nov 08, 2018 | by Techniquant Editorial Team
DAX ended Thursday at 11527.32 losing €51.78 (-0.45%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 11532.34, the market confirmed its breakout through the prior session low after trading up to €28.98 below it intraday.
Daily Candlestick Chart (DAX as at Nov 08, 2018):
Thursday's trading range has been €145.43 (1.25%), that's slightly below the last trading month's daily average range of €163.23. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for DAX.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. The last time this happened on October 22nd, DAX lost -2.17% on the following trading day. In spite of a strong opening the index closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 11459.08 (S1). After having been unable to move above 11634.81 in the prior session, the stock index ran into sellers again around the same price level today, missing to move higher than 11648.79.
Though DAX is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the close-by swing high at 11689.96 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 11436.53 where further sell stops could get activated.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Close to S1 Support" stand out. Its common bullish interpretation has been confirmed for DAX. Out of 1,161 times, DAX closed higher 57.02% 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 60.47% with an average market move of 0.54%.
With four out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are TECDAX losing -0.61% and BEL20 closing -0.27% lower. On the flipside the best performer has been FTSE closing 0.33% higher. Read more