DJIA breaks below Friday's low
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for Dec 02, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DJIA finished Monday at 27783.04 tanking $268.37 (-0.96%). This is the biggest single-day loss in over a month. The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 28042.53, the stock index confirmed its breakout through the prior session low after trading up to $260.18 below it intraday.
Daily Candlestick Chart (DJIA as at Dec 02, 2019):
Monday's trading range has been $327.49 (1.17%), that's far above the last trading month's daily average range of $148.52. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for DJIA.
In spite of a strong opening Dow Indu. closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The index closed below the 20-day moving average at 27818.83 for the first time since October 10th. When this moving average was crossed below the last time on October 1st, DJIA lost -1.86% on the following trading day. After having been unable to move above 28119.51 in the prior session, the Dow ran into sellers again around the same price level today, failing to move higher than 28109.84.
While the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the nearby swing low at 27675.28 where further sell stops could get triggered.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Dow Indu.. Out of 65 times, DJIA closed higher 61.54% 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 67.69% with an average market move of 0.75%.
With four out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are DAX losing -2.05% and NDX closing -1.12% lower. On the flipside the best performers have been NKY closing 1.01% higher and HSI gaining 0.37%. Read more