FTSE closes within previous day's range
FTSE 100 Index (FTSE) Technical Analysis Report for Jan 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, FTSE ended Tuesday at 7622.35 gaining £4.75 (0.06%). Trading up to £28.79 lower after the open, the index managed to reverse during the session as bulls took control ending the day above its opening price. 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 14, 2020):
Tuesday's trading range has been £61.88 (0.81%), that's slightly below the last trading month's daily average range of £69.43. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FTSE. Prices continued to consolidate within a tight trading range between 7582.50 and 7650.69 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish Spinning Top showed up on December 20, 2019, FTSE gained 0.54% on the following trading day.
Unable to break through the key technical resistance level at 7626.40 (R1), the Footsie closed below it after spiking up to 7650.69 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. The stock index found buyers again today around 7588.81 for the third trading day in a row after having found demand at 7582.50 in the prior session and at 7585.10 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 7582.50 where further sell stops might get activated. 2019's high at 7727.50 is within reach and we could see further upside momentum should FTSE 100 manage to break out beyond. Further buying might move prices higher should the market test December's nearby high at 7665.40.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish High-Wave Candle" stand out. Its common bullish interpretation has been confirmed for FTSE 100. Out of 20 times, FTSE closed higher 75.00% 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 60.00% with an average market move of 0.43%.
With five out of the other five Major European Indices closing higher today, the ones that stand out on the positive side are TECDAX gaining 0.17% and N100 closing 0.15% higher. None of the markets ended the day in the red. Read more