FTSE breaks below Thursday's low
FTSE 100 Index (FTSE) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, FTSE ended the week 3.34% higher at 5993.28 after edging lower £22.02 (-0.37%) today ahead of tomorrow's Late May Bank Holiday. Closing below Thursday's low at 6004.10, the market confirmed its breakout through the previous session low after trading up to £115.52 below it intraday.
Daily Candlestick Chart (FTSE as at May 22, 2020):
Friday's trading range has been £126.67 (2.11%), that's slightly below the last trading month's daily average range of £133.09. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FTSE.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on April 20th, FTSE lost -2.96% on the following trading day.
After trading as low as 5888.58 during the day, the index found support at the 20-day moving average at 5911.83.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might speed up should prices move above the close-by swing high at 6093.70 where further buy stops could get triggered. Further buying might move prices higher should the market test April's nearby high at 6151.60.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for FTSE 100. Out of 570 times, FTSE closed higher 52.28% 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 56.67% with an average market move of 0.36%.
With four out of the other five Major European Indices closing higher today, the ones that stand out on the positive side are BEL20 gaining 0.75% and TECDAX closing 0.63% higher. On the flipside the worst performer has been CAC closing -0.02% lower. Read more