DJT closes within prior day's range
Dow Jones Transportation Average Index (DJT) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DJT ended the week 1.32% higher at 11431.92 after losing $120.44 (-1.04%) today. Trading $81.74 higher after the open, the stock index was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DJT as at Sep 18, 2020):
Friday's trading range has been $230.22 (1.99%), that's slightly above the last trading month's daily average range of $195.70. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below 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, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 11488.70 (now R1), which is likely to act as resistance going forward. The last time this happened on July 9th, DJT actually gained 1.88% on the following trading day. After having been unable to move above 11637.15 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 11628.82.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could accelerate should prices move below the close-by swing low at 11332.38 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Dow Trans.. Out of 541 times, DJT closed higher 55.82% 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 61.55% with an average market move of 0.61%.