DAX opened with an upside gap and rallied to 10164. However, higher level could not be sustained and it felt down to 9929 and closed at 9961 with a loss of 24 points. Daily candlestick shows a “Dark Cloud Cover” after “Morning Star” pattern. DAX is in a down trend after a fall below 200 DMA with huge down side gap. Daily MACD is in a sell mode and stochastic is falling.
Today’s negative close could mean much more and deeper downside!
BREAKING DOWN ‘Dark Cloud Cover’
Essentially, the large black candle is forming a “dark cloud” over the preceding bullish trend.
The dark cloud must have a closing price that is:
1) within the price range of the previous day, but
2) below the mid-point between open and closing prices of the previous day.
Read more: Dark Cloud Cover Definition | Investopedia
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