ASX closes below its opening price unable to hold early session gains
S&P/ASX 200 Index (ASX) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
ASX finished Wednesday at 6063.60 losing $15.50 (-0.25%). Trading $14.90 higher after the open, the ASX was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on January 31st, ASX actually gained 0.48% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ASX as at Feb 13, 2019):
Wednesday's trading range has been $41.00 (0.67%), that's slightly below the last trading month's daily average range of $47.25. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for ASX. Prices continued to consolidate within a tight trading range between 6026.10 and 6105.90 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar.
The index ran into sellers again today around 6094.00 for the third trading day in a row after having found sellers at 6093.20 in the previous session and at 6084.90 two days ago.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 6105.90 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 6028.60 where further sell stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for ASX 200. Out of 271 times, ASX closed higher 57.93% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 61.25% with an average market move of 0.68%.