BVSP breaks back below 50-day moving average


Bovespa Index (BVSP) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team

Highlights

BVSP breaks back below 50-day moving average
BVSP dominated by bears dragging the market lower throughout the day
BVSP closes lower for the 2nd day in a row
BVSP breaks below Thursday's low

Overview

Moving lower for the 2nd day in a row, BVSP finished the week 0.62% higher at 114475.27 after losing R$1186.73 (-1.03%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 114801.00, the index confirmed its breakout through the prior session low after trading up to R$668.63 below it intraday.

Daily Candlestick Chart (BVSP as at Feb 14, 2020):

Daily technical analysis candlestick chart for Bovespa Index (BVSP) as at Feb 14, 2020

Friday's trading range has been R$1530.36 (1.32%), that's below the last trading month's daily average range of R$2112.07. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for BVSP.

Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.

Bovespa closed back below the 50-day moving average at 115097.79. When this moving average was crossed below the last time on February 7th, BVSP lost -1.05% on the following trading day.

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

Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Bovespa. Out of 320 times, BVSP closed higher 52.81% 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 55.63% with an average market move of 0.57%.


Market Conditions for BVSP as at Feb 14, 2020

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