DJT breaks back below 50-day moving average
Dow Jones Transportation Average Index (DJT) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DJT ended the week 0.05% higher at 10862.92 after losing $131.22 (-1.19%) today ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 10894.95, the market confirmed its breakout through the prior session low after trading up to $53.68 below it intraday.
Daily Candlestick Chart (DJT as at Feb 14, 2020):
Friday's trading range has been $160.08 (1.46%), that's slightly above the last trading month's daily average range of $147.88. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DJT.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 10781.45 (S1). The stock index closed back below the 50-day moving average at 10893.39. After having been unable to move above 11014.31 in the previous session, the index ran into sellers again around the same price level today, missing to move higher than 11001.35. The last time this happened on Monday, DJT actually gained 0.33% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 10781.45 where further sell stops could get triggered.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Dow Trans.. Out of 302 times, DJT closed higher 55.96% 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 59.93% with an average market move of 0.77%.