SOW.DE slips to lowest close since January 27, 2017
Software Aktiengesellschaft (SOW.DE) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, SOW.DE finished the week -9.58% lower at 32.58 after losing €0.11 (-0.34%) today, underperforming the TecDAX (0.45%). Today's close at 32.58 marks the lowest recorded closing price since January 27, 2017. Trading €0.78 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below 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 (SOW.DE as at Dec 07, 2018):
Friday's trading range has been €1.13 (3.43%), that's slightly above the last trading month's daily average range of €1.06. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for SOW.DE.
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, one bearish candlestick pattern matches today's price action, the Bearish Closing Marubozu. The last time a Bearish Closing Marubozu showed up on November 29th, SOW.DE lost -1.93% on the following trading day.
Prices are trading close to the key technical support level at 32.44 (S1). After having been unable to move lower than 32.44 in the prior session, the share found buyers again around the same price level today at 32.58.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 36.45.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 32.44 where further sell stops might get triggered.
Among the eight 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 Software. Out of 371 times, SOW.DE closed higher 52.83% 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 57.14% with an average market move of 1.07%.