DJIA stuck within tight trading range
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
DJIA ended the week 2.4% higher at 23995.95 after edging lower $5.97 (-0.02%) today. Trading up to $141.84 lower after the open, Dow Indu. managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DJIA as at Jan 11, 2019):
Friday's trading range has been $198.16 (0.83%), that's far below the last trading month's daily average range of $516.71. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DJIA. Prices continued to consolidate within a tight trading range between 23703.25 and 24014.78 where it has been caught now for the last three trading days.
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 are trading close to the key technical resistance level at 24122.23 (R1). The stock index ran into sellers again today around 23996.32 for the third trading day in a row after having found sellers at 24014.78 in the previous session and at 23985.45 two days ago. The last time this happened on January 2nd, DJIA lost -2.83% on the following trading day.
Though the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the close-by swing high at 24014.78 where further buy stops could get triggered. Selling might accelerate should prices move below the nearby swing low at 23703.25 where further sell stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Dow Indu.. Out of 512 times, DJIA closed higher 53.91% 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 64.84% with an average market move of 0.65%.
With four out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are FTSE losing -0.36% and DAX closing -0.31% lower. On the flipside the best performers have been NKY closing 0.97% higher and HSI gaining 0.55%. Read more