DEZ.DE breaks below key technical support level
Deutz AG (DEZ.DE) Technical Analysis Report for Nov 09, 2018 | by Techniquant Editorial Team
DEZ.DE ended the week -4.51% lower at 6.56 after losing €0.24 (-3.53%) today, strongly underperforming the SDAX (-0.47%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 6.68, the stock confirmed its breakout through the previous session low after trading up to €0.16 below it intraday.
Daily Candlestick Chart (DEZ.DE as at Nov 09, 2018):
Friday's trading range has been €0.36 (5.28%), that's above the last trading month's daily average range of €0.29. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for DEZ.DE.
Even with a strong opening Deutz AG closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 6.44 (S1). Prices broke below the key technical support level at 6.71 (now R1), which is likely to act as resistance going forward. After having been unable to move above 6.90 in the previous session, the share ran into sellers again around the same price level today, missing to move higher than 6.88. The last time this happened on Wednesday, DEZ.DE actually gained 2.41% on the following trading day.
Although the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the nearby swing low at 6.46 where further sell stops could get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Deutz AG. Out of 631 times, DEZ.DE closed higher 49.60% 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 58.48% with an average market move of 1.47%.