DAX finds buyers at key support level
DAX Performance-Index (DAX) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DAX finished the month 6.25% higher at 12310.93 after gaining €78.81 (0.64%) today. Trading up to €99.85 lower after the open, the index managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Monday's high at 12297.68, the market confirmed its breakout through the previous session high after trading up to €52.67 above it intraday.
Daily Candlestick Chart (DAX as at Jun 30, 2020):
Tuesday's trading range has been €162.26 (1.32%), that's far below the last trading month's daily average range of €280.10. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for DAX. Prices continued to consolidate within a tight trading range between 12045.26 and 12350.35 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man. The last time a Hanging Man showed up on April 20th, DAX lost -3.99% on the following trading day.
After trading down to 12188.09 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 significance as support going forward. After spiking up to 12350.35 during the day, DAX found resistance at the 20-day moving average at 12328.27.
The index shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could speed up should prices move below the nearby swing low at 12045.26 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Its common bearish interpretation has been confirmed for DAX. Out of 58 times, DAX closed lower 60.34% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 60.34% with an average market move of -1.11%.
With three out of the other five Major European Indices closing higher today, the ones that stand out on the positive side are TECDAX gaining 1.92% and N100 closing 0.1% higher. On the flipside the worst performers have been FTSE closing -0.9% lower and CAC losing -0.19%. Read more