DJT closes above its opening price after recovering from early selling pressure
Dow Jones Transportation Average Index (DJT) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, DJT finished Thursday at 8045.47 gaining $320.60 (4.15%). Trading up to $119.62 lower after the open, the index managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on March 19th, DJT actually lost -3.40% on the following trading day. 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 (DJT as at Mar 26, 2020):
Thursday's trading range has been $332.63 (4.23%), that's far below the last trading month's daily average range of $510.37. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DJT.
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, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Dow Trans. managed to close above the 20-day moving average at 8043.34 for the first time since February 21st. After having been unable to move above 8148.98 in the previous session, the stock index ran into sellers again around the same price level today, failing to move higher than 8085.58.
While the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the nearby swing high at 8148.98 where further buy stops could get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Its common bullish interpretation has been confirmed for Dow Trans.. Out of 150 times, DJT closed higher 58.67% 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 62.67% with an average market move of 0.80%.