BVSP breaks back above 100-day moving average
Bovespa Index (BVSP) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, BVSP ended Tuesday at 94333.31 gaining R$1250.31 (1.34%). Closing above Monday's high at 93723.00, the index confirmed its breakout through the previous session high after trading up to R$1338.95 above it intraday.
Daily Candlestick Chart (BVSP as at Apr 16, 2019):
Tuesday's trading range has been R$2182.96 (2.35%), that's slightly above the last trading month's daily average range of R$1952.85. 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 BVSP.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
The market managed to close back above the 100-day moving average at 93390.69. Unable to break through the key technical resistance level at 94695.00 (R1), Bovespa closed below it after spiking up to 95061.95 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on April 10th, BVSP lost -1.25% on the following trading day. After having been unable to move lower than 92697.00 in the prior session, the stock index found buyers again around the same price level today at 92878.99.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Further selling could move prices lower should the market test March's nearby low at 91584.00.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Bovespa. Out of 483 times, BVSP closed higher 53.00% 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 53.62% with an average market move of 0.25%.