DJIA dominated by bulls lifting the market higher throughout the day
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for Jul 10, 2020 | by Techniquant Editorial Team
DJIA finished the week 0.96% higher at 26075.30 after gaining $369.21 (1.44%) today. The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DJIA as at Jul 10, 2020):
Friday's trading range has been $463.82 (1.81%), that's slightly below the last trading month's daily average range of $510.28. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for DJIA. Prices continued to consolidate within a tight trading range between 25523.51 and 26297.53 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
The index managed to close back above the 20-day moving average at 25855.74. Dow Indu. was sold again around 26101.32 after having seen highs at 26103.28, 26109.49 and 26174.93 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on October 1, 2019, DJIA lost -1.86% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 26297.53 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 25523.51 where further sell stops might get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous three Highs" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Dow Indu.. Out of 19 times, DJIA closed higher 68.42% 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 78.95% with an average market move of 1.22%.
With four out of the other six Major World Indices closing higher today, the ones that stand out on the positive side are DAX gaining 1.15% and SPX closing 1.05% higher. On the flipside the worst performers have been HSI closing -1.84% lower and NKY losing -1.06%. Read more