FTSE unable to break through key resistance level
FTSE 100 Index (FTSE) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
FTSE finished the week 1.18% higher at 6918.18 after losing £24.72 (-0.36%) today. Trading £59.07 higher after the open, the index was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, FTSE actually gained 0.74% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (FTSE as at Jan 11, 2019):
Friday's trading range has been £99.29 (1.43%), that's slightly above the last trading month's daily average range of £98.23. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FTSE.
Unable to break through the key technical resistance level at 6961.30 (R1), FTSE 100 closed below it after spiking up to 7001.94 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
Although the stock index is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Selling might accelerate should prices move below the close-by swing low at 6860.80 where further sell stops could get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for FTSE 100. Out of 536 times, FTSE closed higher 50.56% 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 59.51% with an average market move of 0.50%.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are TECDAX losing -0.54% and CAC closing -0.51% lower. None of the markets managed to end the day in the green. Read more