FTSE stuck within tight trading range
FTSE 100 Index (FTSE) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
FTSE finished the month 1.53% higher at 6169.74 after losing £56.06 (-0.9%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (FTSE as at Jun 30, 2020):
Tuesday's trading range has been £90.53 (1.45%), that's below the last trading month's daily average range of £134.57. 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. Prices continued to consolidate within a tight trading range between 6123.00 and 6262.10 where it has been caught now for the last three trading days.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, the stock index closed lower but above the prior day's open today, forming a bearish Harami Candle. The last time this candlestick pattern showed up on June 22nd, FTSE actually gained 1.21% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 6093.70 (S1). After having been unable to move above 6252.00 in the previous session, the index ran into sellers again around the same price level today, missing to move higher than 6237.51.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 6262.10 where further buy stops could get activated. Selling might speed up should prices move below the close-by swing low at 6123.00 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Short Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for FTSE 100. Out of 83 times, FTSE closed higher 50.60% 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 60.24% with an average market move of 0.34%.
With four out of the other five Major European Indices closing higher today, the ones that stand out on the positive side are TECDAX gaining 1.92% and DAX closing 0.64% higher. On the flipside the worst performer has been CAC closing -0.19% lower. Read more