DAX closes above its opening price after recovering from early selling pressure
DAX Performance-Index (DAX) Technical Analysis Report for May 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, DAX ended Tuesday at 11504.65 gaining €113.37 (1.0%). Today's close at 11504.65 marks the highest recorded closing price since March 6th. Trading up to €59.11 lower after the open, the stock index managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (DAX as at May 26, 2020):
Tuesday's trading range has been €114.47 (1.0%), that's far below the last trading month's daily average range of €226.70. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DAX.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top. The last time a Bullish Spinning Top showed up on April 23rd, DAX actually lost -1.69% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 10880.71.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for DAX. Out of 163 times, DAX closed higher 58.90% 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 62.58% with an average market move of 0.51%.
With five out of the other five Major European Indices closing higher today, the ones that stand out on the positive side are BEL20 gaining 5.38% and CAC closing 1.46% higher. None of the markets ended the day in the red. Read more