Tuesday initially brought a rebound, but the day ended as doji bar where supply and demand are almost equal. Monday and yesterday candles formed an inside bar pattern which gives us some trading plan (more on that in a moment). On Tuesday all German indices ended in a positive territory, but increases not matched Monday’s declines. DAX30 +1,06% (11174pkt), MDAX +1,38% (20379pkt), TECDAX +1,00% (1769pkt), SDAX +1,38% (8933pkt). The main index – DAX30 – experienced sell offs in the case of only three companies (K+S lost 0.99%). 27 of companies gained, and the Volkswagen and Bayer ended the day with highest increases (+2.47% and +2%).
The end of Tuesday’s session coincided with the bearish channel upper band. Before mentioned inside bar formation (bullish engulfing) can be used for trading in next sessions. Theoretically it has the bull potential, but its location suggest to stay careful. Using the Monday candle to open a new positions seems as a good idea. Breaking above 11300 = long, breaking below 11050 = short.
