DJU breaks back below 200-day moving average
Dow Jones Utility Average Index (DJU) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
DJU finished the week 0.27% higher at 713.86 after losing $3.18 (-0.44%) today. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (DJU as at Jan 11, 2019):
Friday's trading range has been $6.71 (0.94%), that's below the last trading month's daily average range of $14.61. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for DJU. Prices continued to consolidate within a tight trading range between 700.25 and 717.82 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving higher in the prior session, the market closed lower but above the previous day's open today, forming a bearish Harami Candle.
The index closed back below the 200-day moving average at 715.08. When this moving average was crossed below the last time on December 24, 2018, DJU actually gained 1.66% on the following trading day. After having been unable to move above 717.82 in the prior session, the stock index ran into sellers again around the same price level today, failing to move higher than 716.16.
Though Dow Util. 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 close-by swing high at 717.82 where further buy stops could get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Dow Util.. Out of 101 times, DJU closed higher 52.48% 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 59.41% with an average market move of 0.33%.