ASX dominated by bears dragging the market lower throughout the day
S&P/ASX 200 Index (ASX) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
ASX finished the week 0.54% higher at 4842.40 after losing $270.90 (-5.3%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 4998.10, the ASX confirmed its breakout through the prior session low after trading up to $155.70 below it intraday.
Daily Candlestick Chart (ASX as at Mar 27, 2020):
Friday's trading range has been $394.30 (7.71%), that's above the last trading month's daily average range of $310.45. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for ASX.
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. Despite a strong opening the index closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Closing Marubozu and the Black Candle which are both known as bearish patterns. The last time a Bearish Closing Marubozu showed up on March 16th, ASX actually gained 5.83% on the following trading day.
Prices are trading close to the key technical support level at 4741.00 (S1).
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for ASX 200. Out of 69 times, ASX closed higher 56.52% 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 57.97% with an average market move of 0.36%.