DAX dominated by bears dragging the market lower throughout the day
DAX Performance-Index (DAX) Technical Analysis Report for Jul 17, 2019 | by Techniquant Editorial Team
DAX finished Wednesday at 12341.03 losing €89.94 (-0.72%). 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 Jul 17, 2019):
Wednesday's trading range has been €128.91 (1.04%), that's slightly above the last trading month's daily average range of €117.64. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for DAX.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 12319.05 (S1). The index closed back below the 20-day moving average at 12407.22. When this moving average was crossed below the last time on July 11th, DAX lost -0.07% on the following trading day. The market was bought again around 12324.42 after having seen lows at 12301.08, 12301.08 and 12304.98 in the last three trading sessions. Obviously there is something going on at that level.
While the stock index is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for DAX. Out of 7 times, DAX closed lower 57.14% of the time on the next trading day after the market condition occurred.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are CAC losing -0.76% and BEL20 closing -0.64% lower. None of the markets managed to end the day in the green. Read more