DAX PERFORMANCE-INDEX (.GDAXI) set to rebound after global rout amid oil, virus fears
European markets are expected to open higher Tuesday after stocks on Wall Street saw their worst day since the 2008 financial crisis in the previous trading session.
London’s FTSE index is seen opening 117 points higher at 6,108, the German DAX is expected to open 173 points higher at 10,861 and France’s CAC 40 index is seen 55 points higher at the open, at 4,790, according to IG.
European markets are seen rebounding Tuesday having tanked Monday as global investors braced for the spread of the coronavirus and oil prices fell after the collapse of OPEC talks.
In the U.S., the Dow Jones Industrial Average plummeted 2,013.7 points in its worst day since 2008, while the S&P 500 plunged 7.6% in Monday’s session. Trading was halted for 15 minutes after the S&P 500 sank 7% at the open..
Back in Europe, attention remains firmly on Italy where the government has now extended its quarantine measures to the entire country amid the worst coronavirus outbreak outside Asia. Prime Minister Giuseppe Conte said Monday that Italy’s population, which totals around 60 million, should not travel other than for work or emergencies. Italy’s FTSE MIB is expected to open 584 points lower Tuesday.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
By the way, prices are vulnerable to a correction towards 12,488.86.
The projected upper bound is: 11,057.42.
The projected lower bound is: 9,779.09.
The projected closing price is: 10,418.26.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 8 black candles for a net of 6 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 4.9616. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 4 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 15.21. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 79 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -148.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 4 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 11 period(s) ago.
Rex Takasugi – TD Profile
XETRA DAX PF closed down -149.529 at 10,475.490. Volume was 180% above average (trending) and Bollinger Bands were 394% wider than normal.
Open High Low Close Volume___
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 11,759.07 13,091.39 12,618.62
Volatility: 52 34 22
Volume: 209,632,944 109,343,360 90,867,616
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
XETRA DAX PF is currently 17.0% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of .GDAXI (mildly bearish). Our trend forecasting oscillators are currently bearish on .GDAXI and have had this outlook for the last 10 periods. Our momentum oscillator is currently indicating that .GDAXI is currently in an oversold condition.
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