DAX breaks below Wednesday's low
DAX Performance-Index (DAX) Technical Analysis Report for Jun 18, 2020 | by Techniquant Editorial Team
DAX ended Thursday at 12281.53 losing €100.61 (-0.81%). Trading €136.35 higher after the open, the market 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 29th, DAX actually gained 3.75% on the following trading day. Closing below Wednesday's low at 12288.17, the index confirmed its breakout through the previous session low after trading up to €98.50 below it intraday.
Daily Candlestick Chart (DAX as at Jun 18, 2020):
Thursday's trading range has been €294.17 (2.38%), that's slightly above the last trading month's daily average range of €257.45. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DAX.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 12189.67 earlier during the day, the stock index bounced off the key technical support level at 12207.77 (S1). The failure to close below the support might increase that levels importance as support going forward. DAX ran into sellers again today around 12483.84 for the third trading day in a row after having found sellers at 12432.23 in the prior session and at 12434.27 two days ago.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for DAX. Out of 388 times, DAX closed higher 60.05% 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 59.54% with an average market move of 0.38%.
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 -6.0% and BEL20 closing -0.78% lower. None of the markets managed to end the day in the green. Read more