DJU finds buyers again around 818.60
Dow Jones Utility Average Index (DJU) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
DJU finished the month 8.24% higher at 830.77 after gaining $2.64 (0.32%) today. Today's close at 830.77 marks the highest recorded closing price since June 8th. Trading up to $6.36 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 828.24, the index confirmed its breakout through the prior session high after trading up to $3.82 above it intraday.
Daily Candlestick Chart (DJU as at Jul 31, 2020):
Friday's trading range has been $13.46 (1.63%), that's slightly below the last trading month's daily average range of $15.29. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DJU. Prices continued to consolidate within a tight trading range between 818.60 and 832.06 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar.
Prices are trading close to the key technical support level at 826.33 (S1). After spiking up to 832.06 during the day, the stock index found resistance at the 200-day moving average at 830.99. The last time this happened on Tuesday, DJU actually gained 0.42% on the following trading day. After having been unable to move lower than 818.87 in the previous session, Dow Util. found buyers again around the same price level today at 818.60.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might speed up should prices move above the close-by swing high at 832.35 where further buy stops could get triggered. Further buying might move prices higher should the market test June's nearby high at 849.44.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for Dow Util.. Out of 515 times, DJU closed higher 56.12% 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 59.42% with an average market move of 0.41%.