DAX stuck within tight trading range
DAX Performance-Index (DAX) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
DAX finished the week 0.84% higher at 12633.71 after gaining €144.25 (1.15%) today. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (DAX as at Jul 10, 2020):
Friday's trading range has been €233.30 (1.88%), that's slightly below the last trading month's daily average range of €244.84. Weekly volatility is also lower, being slightly below 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 12416.69 and 12709.68 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 12416.69 earlier during the day, the stock index bounced off the key technical support level at 12434.27 (S1). The failure to close below the support could increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 1st, DAX gained 2.84% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might speed up should prices move above the close-by swing high at 12709.68 where further buy stops could get activated. Further buying might move prices higher should the market test June's nearby high at 12913.13.
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 389 times, DAX closed higher 59.90% 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 59.13% with an average market move of 0.37%.
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 1.43% and CAC closing 1.01% higher. None of the markets ended the day in the red. Read more