DJU breaks below Thursday's low
Dow Jones Utility Average Index (DJU) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, DJU finished the week -0.25% lower at 797.95 after losing $12.86 (-1.59%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 802.14, the index confirmed its breakout through the prior session low after trading up to $5.88 below it intraday.
Daily Candlestick Chart (DJU as at Sep 18, 2020):
Friday's trading range has been $15.75 (1.94%), that's slightly above the last trading month's daily average range of $13.65. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for DJU.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 794.45 (S1). The stock index closed back below the 100-day moving average at 798.55 for the first time since September 10th. When this moving average was crossed below the last time on September 10th, DJU actually gained 0.45% on the following trading day. After having been unable to move above 813.43 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 812.01.
Dow Util. shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling might accelerate should prices move below the close-by swing low at 792.76 where further sell stops could get activated. As prices are trading close to September's low at 791.13, downside momentum might speed up should DJU mark new lows for the month.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for Dow Util.. Out of 251 times, DJU closed higher 60.16% 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 63.75% with an average market move of 0.48%.