ASX50 breaks below key technical support level


S&P/ASX 50 Index (ASX50) Technical Analysis Report for Jul 12, 2019 | by Techniquant Editorial Team

Highlights

ASX50 breaks below key technical support level
ASX50 still stuck within tight trading range
ASX50 closes within previous day's range after lackluster session

Overview

ASX50 finished the week -0.96% lower at 6644.60 after losing $14.00 (-0.21%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.

Daily Candlestick Chart (ASX50 as at Jul 12, 2019):

Daily technical analysis candlestick chart for S&P/ASX 50 Index (ASX50) as at Jul 12, 2019

Friday's trading range has been $32.70 (0.49%), that's far below the last trading month's daily average range of $70.37. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for ASX50. Prices continued to consolidate within a tight trading range between 6598.10 and 6729.20 where it has been caught now for the whole last trading week.

During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.

Prices broke below the key technical support level at 6649.30 (now R1), which is likely to act as resistance going forward. The last time this happened on Monday, ASX50 lost -0.02% on the following trading day.

The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.

Selling might speed up should prices move below the close-by swing low at 6579.10 where further sell stops could get activated.

Among the two market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for ASX 50. Out of 324 times, ASX50 closed higher 52.78% 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 55.56% with an average market move of 0.40%.


Market Conditions for ASX50 as at Jul 12, 2019

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