DJIA unable to break through key resistance level
Dow Jones Industrial Average Index (DJIA) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, DJIA finished Wednesday at 28032.38 edging higher $36.78 (0.13%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (DJIA as at Sep 16, 2020):
Wednesday's trading range has been $343.10 (1.22%), that's slightly below the last trading month's daily average range of $413.68. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DJIA.
Four candlestick patterns are matching today's price action, the Gravestone Doji, the Northern Doji and the Shooting Star which are known as bearish patterns and one neutral pattern, the Doji.
Unable to break through the key technical resistance level at 28206.21 (R1), the index closed below it after spiking up to 28364.77 earlier during the day. The failure to close above the resistance could increase that levels importance going forward. When prices bounced off a significant resistance level the last time on September 9th, DJIA lost -1.45% on the following trading day.
Though the market is currently in a short-term downtrend, this might 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 Price Action based market condition "Close near low of period" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Dow Indu.. Out of 448 times, DJIA closed higher 57.37% 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 62.95% with an average market move of 0.57%.
With four out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are NDX losing -1.67% and SPX closing -0.46% lower. On the flipside the best performers have been DAX closing 0.29% higher and NKY gaining 0.09%. Read more