ASX finds buyers around 5883.20 for the third day in a row
S&P/ASX 200 Index (ASX) Technical Analysis Report for Sep 17, 2020 | by Techniquant Editorial Team
ASX finished Thursday at 5883.20 losing $72.90 (-1.22%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 5894.80, the index confirmed its breakout through the previous session low after trading up to $11.60 below it intraday.
Daily Candlestick Chart (ASX as at Sep 17, 2020):
Thursday's trading range has been $73.30 (1.23%), that's slightly below the last trading month's daily average range of $81.54. 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.
Notwithstanding a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The ASX closed below the 100-day moving average at 5883.21 for the first time since June 15th. When this moving average was crossed below the last time on June 12th, ASX lost -2.19% on the following trading day. The stock index found buyers again today around 5883.20 for the third trading day in a row after having found demand at 5894.80 in the previous session and at 5883.90 two days ago.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying might speed up should prices move above the nearby swing high at 5958.50 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 5836.20 where further sell stops could get activated.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Down Close Near Low of Period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for ASX 200. Out of 516 times, ASX closed higher 55.43% 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 57.56% with an average market move of 0.14%.