FTSE dominated by bears dragging the market lower throughout the day
FTSE 100 Index (FTSE) Technical Analysis Report for Jul 17, 2019 | by Techniquant Editorial Team
FTSE ended Wednesday at 7535.46 losing £41.74 (-0.55%). The bears were in full control today, moving the market lower throughout the whole session. 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 Jul 17, 2019):
Wednesday's trading range has been £57.98 (0.77%), that's slightly above the last trading month's daily average range of £53.45. 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 lower than usual for FTSE.
Two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
Prices broke below the key technical support level at 7559.10 (now R1), which is likely to act as resistance going forward. After having been unable to move lower than 7524.50 in the prior session, the Footsie found buyers again around the same price level today at 7519.22. The last time this happened on Monday, FTSE gained 0.60% on the following trading day.
While the index is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 7590.10 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 7487.40 where further sell stops might get triggered. With prices trading close to this year's high at 7622.60, upside momentum could speed up should FTSE 100 be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for FTSE 100. Out of 55 times, FTSE closed higher 61.82% of the time on the next trading day after the market condition occurred.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are CAC losing -0.76% and DAX closing -0.72% lower. None of the markets managed to end the day in the green. Read more