Bayer and Deutsche Bank

After Friday Inside day for the whole Dax30 Index, let's focus on Bayer and Deutche Bank.

Bayer this morning opened with a gap down and then prices rallied fast until to break yesterday High designing an Outside day, which is a buy signal, even if prices are right in the middle of Bollinger Bands so they seem chopping.

Deutsche Bank has a more interesting chart: prices are very close to the upper band, today is the second inside day and volume are decreasing. The compression here is more visible and a good move should come shortly.

Dax Stocks with Inside Day Pattern

Last Friday the Dax Future designed an Inside Day.
In the list below you find the 10 DAX stocks that designed an Inside Day as well, you can find also the different compression NR level. So, for example, Deutche Post formed an IdNR4 pattern, Deutche Bank an IdNr3 and so on...

According to the classic technical analysis the Inside Day pattern is an opportunity to buy High/Low break-out, with a low risk level.

If you want to follow this strategy be aware that, at the same time, a lot of strategies are in placed to exploit (sometimes to make them happened) fake Inside Days breakout.

The only way to understand if "big guns" investor are really placing order or, at the opposite, some "shark" is trying to trap you is not to follow prices, but to monitor volumes.






In next Monday posts we will try to follow some of listed stocks.

Dax Future weekly analysis

This is weekly analisys of Dax future using Bollinger Bands (20,2), volumes and Bollinger BandWidth.

This chart shows that weekly prices are touching the upper band with decreasing volumes; this suggest to me that the up trend started at the beginning of march is weaker.

Have a look to the Bollinger BandWidth: flat!

Is Dax entering in a new trading range? If this analisys is well done and you are a long term investor, well... don't be in a hurry!

Volatility compression and Boll% Indicator

Here you find a list of Dax30 Stocks with a volatility compression pattern NR4 at Wed May 6th .

You find also the Boll% value, which gives the stock position respect to the Bollinger Channel.

Why this? Have a look to MRK, whose Boll% is 0.38.

I have no need to look at the chart to know that the stock is under the center of the Bollinger Channel.

This information could be very useful to time for example a long trade on MRK.

Dax Stocks in volatility compression

According to Technical Analisys, a stock could be considered in a volatility compression mode when the daily range is narrower than the previous day (pattern NR2) or than the previous 2 days (NR3) and so on.

In the list you find the patterns NR for Dax Stocks at 5th may2009.


15 stocks out of 30 are in a compression mode: a volatility explosion is going to come...