DAX tumbles, losing €503.06 (-4.17%) within a single day
DAX Performance-Index (DAX) Technical Analysis Report for Oct 28, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DAX ended Wednesday at 11560.51 tanking €503.06 (-4.17%). This is the biggest single-day loss in over a month. The last time we've seen such an unusually strong single-day loss on Monday, DAX lost -0.93% on the following trading day. Today's close at 11560.51 marks the lowest recorded closing price since May 26th. The bears were in full control today, moving the market lower throughout the whole session.
Daily Candlestick Chart (DAX as at Oct 28, 2020):
Wednesday's trading range has been €394.90 (3.33%), that's far above the last trading month's daily average range of €179.88. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for DAX.
One bearish candlestick pattern matches today's price action, the Black Candle.
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 although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 12705.68.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for DAX. Out of 156 times, DAX closed higher 54.49% 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 59.62% with an average market move of 0.51%.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are CAC losing -3.37% and BEL20 closing -3.34% lower. None of the markets managed to end the day in the green. Read more