ASX dominated by bears dragging the market lower throughout the day
S&P/ASX 200 Index (ASX) Technical Analysis Report for Sep 21, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, ASX ended Monday at 5822.60 losing $41.90 (-0.71%). Today's close at 5822.60 marks the lowest recorded closing price since June 29th. The bears were in full control today, moving the market lower throughout the whole session.
Daily Candlestick Chart (ASX as at Sep 21, 2020):
Monday's trading range has been $60.30 (1.03%), that's below the last trading month's daily average range of $82.32. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ASX.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 5836.20 (now R1), which is likely to act as resistance going forward. The last time this happened on September 17th, ASX lost -0.32% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "3 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for ASX 200. Out of 142 times, ASX closed higher 61.27% 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 56.34% with an average market move of 0.34%.