MUV2.DE unable to break through key resistance level
Münchener Rück AG (MUV2.DE) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
MUV2.DE ended the week -2.61% lower at 186.90 after gaining €0.90 (0.48%) today on low volume, outperforming the DAX (-0.21%). Trading €1.90 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (MUV2.DE as at Dec 07, 2018):
Friday's trading range has been €2.45 (1.31%), that's below the last trading month's daily average range of €3.07. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for MUV2.DE.
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, one bullish candlestick pattern matches today's price action, the Homing Pigeon.
Prices are trading close to the key technical support level at 184.60 (S1). Unable to break through the key technical resistance level at 187.95 (R1), Münchener closed below it after spiking up to 189.35 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on November 30th, MUV2.DE actually gained 1.07% on the following trading day.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 191.82.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the nearby swing low at 184.60 where further sell stops might get triggered. Trading close to October's low at 181.20 we could see further downside momentum if potential sell stops at the level get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Münchener. Out of 380 times, MUV2.DE closed higher 53.42% 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 56.32% with an average market move of 0.29%.