DAX slumps, losing €271.70 (-2.05%) within a single day
DAX Performance-Index (DAX) Technical Analysis Report for Dec 02, 2019 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DAX ended Monday at 12964.68 tanking €271.70 (-2.05%). This is the biggest single-day loss in over two months. Today's close at 12964.68 marks the lowest recorded closing price since November 1st. The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 13165.07, the market confirmed its breakout through the prior session low after trading up to €210.57 below it intraday.
Daily Candlestick Chart (DAX as at Dec 02, 2019):
Monday's trading range has been €383.75 (2.89%), that's far above the last trading month's daily average range of €110.64. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly 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. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The index closed below the 20-day moving average at 13204.24 for the first time since October 10th. When this moving average was crossed below the last time on October 1st, DAX lost -2.76% on the following trading day.
Crossing below the lower Bollinger Band for the first time since October 4th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 13204.24 or signal the beginning of a strong momentum breakout leading to even lower prices.
Although 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.
Further selling might move prices lower should the market test November's close-by low at 12896.72.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for DAX. Out of 257 times, DAX closed higher 57.98% 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 60.70% with an average market move of 0.80%.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are TECDAX losing -2.43% and CAC closing -2.01% lower. None of the markets managed to end the day in the green. Read more