FTSE pushes through Thursday's high
FTSE 100 Index (FTSE) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
FTSE finished the week -1.15% lower at 7585.98 after surging £78.28 (1.04%) today. This is the biggest single-day gain in over a month. Closing above Thursday's high at 7572.10, FTSE 100 confirmed its breakout through the prior session high after trading up to £70.11 above it intraday.
Daily Candlestick Chart (FTSE as at Jan 24, 2020):
Friday's trading range has been £134.62 (1.79%), that's far above the last trading month's daily average range of £65.65. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for FTSE.
Regardless of a weak opening the index managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 7559.60 (now S1), which is likely to act as support going forward. After spiking up to 7642.21 during the day, the market found resistance at the 20-day moving average at 7600.30. The last time this happened on December 12, 2019, FTSE actually gained 1.10% on the following trading day. After having been unable to move lower than 7503.20 in the prior session, the stock index found buyers again around the same price level today at 7507.59.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 7600.30.
Though the Footsie is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
2019's high at 7727.50 is within reach and we could see further upside momentum should FTSE manage to break out beyond.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed above the lower Bollinger Band" stand out. Its common bullish interpretation has been confirmed for FTSE 100. Out of 87 times, FTSE closed higher 63.22% 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 63.22% with an average market move of 1.20%.
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 1.76% and DAX closing 1.41% higher. None of the markets ended the day in the red. Read more