SDAX finds buyers again around 8946.01
SDAX Performance-Index (SDAX) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, SDAX ended Thursday at 9325.16 gaining €173.79 (1.9%). Trading up to €133.32 lower after the open, the stock index managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Monday, SDAX gained 9.14% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SDAX as at Mar 26, 2020):
Thursday's trading range has been €379.15 (4.18%), that's slightly below the last trading month's daily average range of €423.81. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for SDAX.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
Prices are trading close to the key technical resistance level at 9409.79 (R1). After having been unable to move lower than 8871.46 in the previous session, the market found buyers again around the same price level today at 8946.01.
While the index is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish. With its 50-day moving average crossing below its 200-day moving average, SDAX has entered a so-called "Death Cross" for the first time since October 24, 2019. Showing increasing downward momentum in the short and medium-term the "Death Cross" is known to indicate a potential bear market on the horizon.
Buying might accelerate should prices move above the close-by swing high at 9409.79 where further buy stops could get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Death Cross" stand out. Its common bearish interpretation has been confirmed for SDAX. Out of 4 times, SDAX closed lower 100.00% 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 50.00% with an average market move of -0.63%.
With three out of the other three German Stock Indices closing higher today, the ones that stand out on the positive side are MDAX gaining 3.2% and TECDAX closing 1.93% higher. None of the markets ended the day in the red. Read more