ASX fails to close above 20-day moving average
S&P/ASX 200 Index (ASX) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
ASX ended the month 2.47% higher at 5897.90 after gaining $82.90 (1.43%) today. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (ASX as at Jun 30, 2020):
Tuesday's trading range has been $140.20 (2.41%), that's slightly above the last trading month's daily average range of $119.00. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for ASX.
One bullish candlestick pattern matches today's price action, the White Candle.
After spiking up to 5955.20 during the day, the stock index found resistance at the 20-day moving average at 5935.06. The last time this happened on March 31st, ASX actually gained 3.58% on the following trading day.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the close-by swing high at 5999.20 where further buy stops could get activated.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for ASX 200. Out of 46 times, ASX closed higher 60.87% 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 58.70% with an average market move of 0.65%.