DAX stuck within tight trading range
DAX Performance-Index (DAX) Technical Analysis Report for May 21, 2020 | by Techniquant Editorial Team
DAX finished Thursday at 11065.93 losing €157.78 (-1.41%). Trading €106.80 higher after the open, the stock index was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on May 15th, DAX actually gained 5.67% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DAX as at May 21, 2020):
Thursday's trading range has been €158.01 (1.43%), that's below the last trading month's daily average range of €224.16. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DAX. Prices continued to consolidate within a tight trading range between 10936.07 and 11246.91 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, the index closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Shooting Star which are both known as bearish patterns.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 11246.91 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for DAX. Out of 228 times, DAX closed higher 53.51% 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 64.04% with an average market move of 0.53%.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are BEL20 losing -1.81% and N100 closing -1.27% lower. None of the markets managed to end the day in the green. Read more