ASX dominated by bulls lifting the market higher throughout the day
S&P/ASX 200 Index (ASX) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
ASX finished Wednesday at 5956.10 gaining $61.30 (1.04%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 5919.20, the market confirmed its breakout through the previous session high after trading up to $39.30 above it intraday.
Daily Candlestick Chart (ASX as at Sep 16, 2020):
Wednesday's trading range has been $63.70 (1.08%), that's slightly below the last trading month's daily average range of $81.42. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ASX.
Despite a weak opening the ASX managed to close above the prior day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 5908.90 (now S1), which is likely to act as support going forward. After having been unable to move lower than 5883.90 in the previous session, ASX 200 found buyers again around the same price level today at 5894.80. The last time this happened on August 31st, ASX actually lost -1.77% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could speed up should prices move above the close-by swing high at 6025.50 where further buy stops might get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Up Move" stand out. Its common bullish interpretation has been confirmed for ASX 200. Out of 591 times, ASX closed higher 54.15% 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 57.53% with an average market move of 0.22%.