DAX closes lower for the 2nd day in a row
DAX Performance-Index (DAX) Technical Analysis Report for Jun 09, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DAX ended Tuesday at 12617.99 losing €201.60 (-1.57%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Monday's low at 12670.95, the stock index confirmed its breakout through the prior session low after trading up to €168.50 below it intraday.
Daily Candlestick Chart (DAX as at Jun 09, 2020):
Tuesday's trading range has been €362.46 (2.82%), that's far above the last trading month's daily average range of €238.75. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for DAX.
Regardless of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on May 13th, DAX lost -1.95% on the following trading day.
The index ran into sellers again today around 12864.91 for the third trading day in a row after having found sellers at 12913.13 in the prior session and at 12858.79 two days ago.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the nearby swing high at 12913.13 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for DAX. Out of 79 times, DAX closed higher 55.70% 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 two trading days, showing a win rate of 60.76% with an average market move of 0.22%.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are FTSE losing -2.12% and CAC closing -1.55% lower. None of the markets managed to end the day in the green. Read more