MDAX runs into sellers around 27691.99 for the third day in a row
MDAX Performance-Index (MDAX) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
MDAX ended Wednesday at 27691.99 gaining €193.10 (0.7%). 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 in a lackluster session.
Daily Candlestick Chart (MDAX as at Sep 16, 2020):
Wednesday's trading range has been €155.07 (0.56%), that's far below the last trading month's daily average range of €407.78. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for MDAX. Prices continued to consolidate within a tight trading range between 27226.57 and 27696.86 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Buyers managed to take out the key technical resistance level at 27602.85 (now S1), which is likely to act as support going forward. The last time this happened on September 2nd, MDAX actually lost -2.41% on the following trading day. The market ran into sellers again today around 27691.99 for the third trading day in a row after having found sellers at 27696.86 in the prior session and at 27652.58 two days ago.
While the index is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the close-by swing high at 27696.86 where further buy stops could get triggered. As prices are trading close to September's high at 28176.71, upside momentum might speed up should the stock index mark new highs for the month.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for MDAX. Out of 168 times, MDAX closed higher 55.95% 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 68.45% with an average market move of 0.86%.
With three out of the other three German Stock Indices closing higher today, the ones that stand out on the positive side are TECDAX gaining 0.79% and SDAX closing 0.57% higher. None of the markets ended the day in the red. Read more