Good “Morning Star” for investors!!

Germany – DAX (9985) Target (10200)

Giving a break to the down ward journey, DAX rallied and closed with a gain of 160 points yesterday. The Inability to break 9800 for the third successive day seems to have triggered the bounce. With yesterday’s rise, daily candlestick shows “Morning Star” pattern. DAX has corrected 9.64% from the recent high of 10857 and is in a downtrend with a fall below 200 DMA. Daily MACD is in a sell mode. However, stochastic has reached over sold territory. Positive divergence can also be seen in 14 days RSI. Thus formation of Morning Star and occurrence of positive divergence in oscillator has increased a chance of bounce back.

France – CAC (4378) Target (4470)

A break in the down ward journey pulled CAC to closing with a gain of 66 points. Daily candlestick shows “Morning Star” pattern. With the fall, it has corrected 8.55% within 8 trading sessions and has entered into the lower trading range, between 4500 and 4200. Although, daily MACD is in a sell mode, stochastic has reached over sold territory and positive divergence can be seen in 14 days RSI. Formation of Morning Star and occurrence of positive divergence in oscillator has increased a chance of bounce back.

UK – FTSE 100 (5980) Target (6200)

Price rallied further yesterday after staging a rebound during Monday’s session from prior bottom at 5850. Candlestick in daily chart is a long bullish candle implying a short term bottom in the making. The daily momentum oscillators have also reached oversold territory particularly stochastic indicator that is close to giving a buy signal soon.

India – NIFTY (7510) Target (7590)

Nifty fell to 7488 yesterday and closed at 7510 with a loss of 53 points. This is the lowest close after August 2014. After an initial dip, Nifty traded range bound between 7490 and 7530 for the entire day. Nifty has corrected 485 points within seven trading days. Daily MACD is in sell mode. Daily stochastic is falling and index is below 13 & 30 DMA. It remains a sell. However, with the fall, Nifty has reached a major support level of 7500 (+/- 50 points) and daily stochastic has reached over sold zone. Even daily oscillators, such as RSI and stochastic have failed to make a new low despite the same in index.

DEFINITION of ‘Morning Star’

A bullish candlestick pattern that consists of three candles that have demonstrated the following characteristics:

1. The first bar is a large red candlestick located within a defined downtrend.
2. The second bar is a small-bodied candle (either red or white) that closes below the first red bar.
3. The last bar is a large white candle that opens above the middle candle and closes near the center of the first bar’s body.

As shown by the chart, this pattern is used by traders as an early indication that the downtrend is about to reverse.

Read more: Morning Star Definition | Investopedia http://www.investopedia.com/terms/m/morningstar.asp#ixzz3x7B1vghK
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