DAX climbs to highest close since March 6th
DAX Performance-Index (DAX) Technical Analysis Report for May 20, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, DAX finished Wednesday at 11223.71 gaining €148.42 (1.34%). Today's close at 11223.71 marks the highest recorded closing price since March 6th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 11201.18, the market confirmed its breakout through the prior session high after trading up to €45.73 above it intraday.
Daily Candlestick Chart (DAX as at May 20, 2020):
Wednesday's trading range has been €268.34 (2.43%), that's above the last trading month's daily average range of €221.45. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DAX.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on March 26th, DAX lost -3.68% on the following trading day.
After having been unable to move lower than 10936.07 in the previous session, the index found buyers again around the same price level today at 10978.57.
Although the stock index is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for DAX. Out of 80 times, DAX closed higher 53.75% 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 nine trading days, showing a win rate of 60.00% with an average market move of 0.08%.
With five out of the other five Major European Indices closing higher today, the ones that stand out on the positive side are TECDAX gaining 1.81% and N100 closing 1.36% higher. None of the markets ended the day in the red. Read more