February was catastrophic for stocks. Especially the first and the last week of the month. The first week hit traders with volatility. The last week was just a second leg of the bearish drop, a typical continuation of an established downtrend.
The second drop was not as volatile as at the beginning of the February, but it was deeper, at least in Europe. On the German DAX, the price attacked the support on the 11900 points, which was with us since the March 2017 (red). This area is super important for the long-term situation on the German benchmark. Daily candle closing below this area, in theory, should trigger a major sell signal here. So far, buyers are doing everything to protect this level and in the middle of the European session, they are drawing a hammer candlestick. If Monday's trading closes with this formation, we should see a bit more optimism in the next few days.
No doubts that Monday will be a crucial day for the DAX. It is all about the shape of the today's candle. Price closing above the red area will give us a buy signal. Price closing below, will give us quite the opposite.
