FTSE closes lower for the 3rd day in a row
FTSE 100 Index (FTSE) Technical Analysis Report for Dec 06, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, FTSE ended Thursday at 6704.05 tanking £217.75 (-3.15%). This is the biggest single-day loss in over three years. Today's close at 6704.05 marks the lowest recorded closing price since November 4, 2016. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 6921.80, the index confirmed its breakout through the previous session low after trading up to £248.23 below it intraday.
Daily Candlestick Chart (FTSE as at Dec 06, 2018):
Thursday's trading range has been £248.27 (3.59%), that's far above the last trading month's daily average range of £105.53. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for FTSE.
One bearish candlestick pattern matches today's price action, the Black Candle.
Crossing below the lower Bollinger Band for the first time since October 12th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 6999.89 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on October 10th, FTSE lost -1.94% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "52 Week Low" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for FTSE 100. Out of 37 times, FTSE closed higher 62.16% 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 72.97% with an average market move of 2.29%.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are DAX losing -3.48% and BEL20 closing -3.42% lower. None of the markets managed to end the day in the green. Read more