RHM.DE closes higher for the 3rd day in a row
Rheinmetall (RHM.DE) Technical Analysis Report for Nov 09, 2018 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, RHM.DE finished the week -0.7% lower at 79.10 after gaining €0.80 (1.02%) today on high volume, strongly outperforming the MDAX (-0.64%). Trading up to €2.66 lower after the open, Rheinmetall managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (RHM.DE as at Nov 09, 2018):
Friday's trading range has been €5.12 (6.5%), that's far above the last trading month's daily average range of €3.20. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for RHM.DE. Prices continued to consolidate within a tight trading range between 74.94 and 81.20 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns.
Prices are trading close to the key technical resistance level at 81.66 (R1). After having been unable to move lower than 75.92 in the previous session, the stock found buyers again around the same price level today at 76.08. The last time this happened on October 30th, RHM.DE gained 3.60% on the following trading day.
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the nearby swing high at 81.66 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for Rheinmetall. Out of 478 times, RHM.DE closed higher 52.51% 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 59.21% with an average market move of 1.09%.