DJIA stuck within tight trading range
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for May 15, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DJIA finished Wednesday at 25648.02 gaining $115.97 (0.45%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DJIA as at May 15, 2019):
Wednesday's trading range has been $382.99 (1.51%), that's above the last trading month's daily average range of $255.80. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for DJIA. Prices continued to consolidate within a tight trading range between 25222.51 and 25724.89 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on May 10th, DJIA actually lost -2.38% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 25625.95 (now S1), which is likely to act as support going forward. After having been unable to move lower than 25384.03 in the prior session, Dow Indu. found buyers again around the same price level today at 25341.90.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 26240.79.
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Trading close to March's low at 25208.00 we might see further downside momentum if potential sell stops at the level get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Dow Indu.. Out of 598 times, DJIA closed higher 55.69% 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 63.88% with an average market move of 0.46%.
With six out of the other six Major World Indices closing higher today, the ones that stand out on the positive side are NDX gaining 1.37% and DAX closing 0.9% higher. None of the markets ended the day in the red. Read more