FTSE breaks back below 20-day moving average
FTSE 100 Index (FTSE) Technical Analysis Report for Jul 03, 2020 | by Techniquant Editorial Team
FTSE ended the week -0.03% lower at 6157.30 after losing £83.10 (-1.33%) today. Closing below Thursday's low at 6158.00, the market confirmed its breakout through the previous session low after trading up to £20.91 below it intraday.
Daily Candlestick Chart (FTSE as at Jul 03, 2020):
Friday's trading range has been £125.62 (2.01%), that's slightly below the last trading month's daily average range of £131.20. 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.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on April 30th, FTSE lost -2.34% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 6093.70 (S1). The Footsie closed back below the 20-day moving average at 6217.14. After having been unable to move above 6258.60 in the prior session, the index ran into sellers again around the same price level today, missing to move higher than 6262.71.
FTSE 100 shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could accelerate should prices move below the close-by swing low at 6084.50 where further sell stops might get activated. Further selling could move prices lower should the market test June's nearby low at 5952.40.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for FTSE 100. Out of 114 times, FTSE closed higher 59.65% 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 51.75% with an average market move of 0.13%.
With four out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are CAC losing -0.84% and DAX closing -0.64% lower. On the flipside the best performer has been TECDAX closing 0.13% higher. Read more