DJIA misses to close above 100-day moving average
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for Aug 13, 2019 | by Techniquant Editorial Team
DJIA ended Tuesday at 26279.91 surging $383.47 (1.48%). This is the biggest single-day gain in over two months. Closing above Monday's high at 26178.95, the market confirmed its breakout through the previous session high after trading up to $248.02 above it intraday.
Daily Candlestick Chart (DJIA as at Aug 13, 2019):
Tuesday's trading range has been $593.77 (2.29%), that's far above the last trading month's daily average range of $315.84. 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.
Despite a weak opening Dow Indu. managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up 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 26019.32 (now S1), which is likely to act as support going forward. After spiking up to 26426.97 during the day, the index found resistance at the 100-day moving average at 26295.96. After having been unable to move lower than 25824.94 in the previous session, the Dow found buyers again around the same price level today at 25833.20.
Though the stock index is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 100" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Dow Indu.. Out of 16 times, DJIA closed higher 62.50% 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 68.75% with an average market move of 0.50%.
With four out of the other six Major World Indices closing higher today, the ones that stand out on the positive side are NDX gaining 2.2% and SPX closing 1.51% higher. On the flipside the worst performers have been HSI closing -2.1% lower and NKY losing -1.11%. Read more