DJU pushes through key technical resistance level
Dow Jones Utility Average Index (DJU) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, DJU finished the month -4.89% lower at 767.50 after gaining $3.11 (0.41%) today. Trading up to $5.76 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (DJU as at Jun 30, 2020):
Tuesday's trading range has been $12.05 (1.58%), that's far below the last trading month's daily average range of $20.20. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for DJU. Prices continued to consolidate within a tight trading range between 745.40 and 772.07 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern. The last time a Bearish Hikkake Pattern showed up on May 18th, DJU lost -1.52% on the following trading day.
Buyers managed to take out the key technical resistance level at 766.86 (now S1), which is likely to act as support going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Further selling might move prices lower should the market test May's close-by low at 730.31.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Its common bullish interpretation has been confirmed for Dow Util.. Out of 348 times, DJU closed higher 56.61% 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 58.33% with an average market move of 0.22%.