DJA still stuck within tight trading range
Dow Jones Composite Average Index (DJA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
DJA ended the week 4.45% higher at 7878.64 after edging higher $20.27 (0.26%) today ahead of tomorrow's Memorial Day market holiday. Trading up to $44.92 lower after the open, the index managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on May 15th, DJA gained 4.60% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DJA as at May 22, 2020):
Friday's trading range has been $70.49 (0.9%), that's far below the last trading month's daily average range of $136.16. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DJA. Prices continued to consolidate within a tight trading range between 7702.07 and 7946.45 where it has been caught now for the whole last trading week.
After having been unable to move lower than 7830.91 in the previous session, the market found buyers again around the same price level today at 7812.30.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the close-by swing high at 7946.45 where further buy stops might get activated. Further buying could move prices higher should the market test April's nearby high at 8071.71.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for Dow Comp.. Out of 689 times, DJA closed higher 57.04% 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 59.22% with an average market move of 0.33%.