DJIA stuck within tight trading range
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for Jan 13, 2020 | by Techniquant Editorial Team
DJIA ended Monday at 28907.05 gaining $83.28 (0.29%). Trading up to $49.57 lower after the open, the Dow managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DJIA as at Jan 13, 2020):
Monday's trading range has been $90.48 (0.31%), that's below the last trading month's daily average range of $164.37. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above 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 28789.10 and 29009.07 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Buyers managed to take out the key technical resistance level at 28872.80 (now S1), which is likely to act as support going forward. The last time this happened on January 9th, DJIA actually lost -0.46% on the following trading day. After having been unable to move lower than 28789.10 in the prior session, the index found buyers again around the same price level today at 28819.43.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 29009.07 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 28789.10 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Its common bullish interpretation has been confirmed for Dow Indu.. Out of 419 times, DJIA closed higher 55.13% 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 63.72% with an average market move of 0.42%.
With four out of the other five Major World Indices closing higher today, the ones that stand out on the positive side are NDX gaining 1.16% and HSI closing 1.11% higher. On the flipside the worst performer has been DAX closing -0.24% lower. Read more