DJIA finds buyers at key support level
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DJIA finished the week 1.02% higher at 29398.08 after losing $25.23 (-0.09%) today ahead of tomorrow's Presidents' Day market holiday. 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 Feb 14, 2020):
Friday's trading range has been $179.86 (0.61%), that's below the last trading month's daily average range of $253.01. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DJIA.
Despite a strong opening the Dow closed below the prior day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on January 10th, DJIA actually gained 0.29% on the following trading day.
After trading down to 29283.18 earlier during the day, the market bounced off the key technical support level at 29373.62 (S1). The failure to close below the support could increase that levels significance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 29568.57 where further buy stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. While 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 66.15% with an average market move of 0.68%.
With three of the other Major World Indices closing higher and three closing lower today, the winners of the day are HSI surging 0.31% and NDX gaining 0.29%. On the flipside the worst performers have been NKY closing -0.59% lower and FTSE losing -0.58%. Read more