FTSE runs into sellers around 6056.47 for the third day in a row
FTSE 100 Index (FTSE) Technical Analysis Report for Aug 04, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, FTSE finished Tuesday at 6036.00 edging higher £3.10 (0.05%). Trading up to £46.08 lower after the open, the stock index managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 14th, FTSE gained 1.83% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (FTSE as at Aug 04, 2020):
Tuesday's trading range has been £69.70 (1.16%), that's below the last trading month's daily average range of £96.06. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for FTSE.
One neutral candlestick pattern matches today's price action, the Doji.
Prices are trading close to the key technical support level at 5961.60 (S1). Prices are trading close to the key technical resistance level at 6084.50 (R1). The market ran into sellers again today around 6056.47 for the third trading day in a row after having found sellers at 6038.80 in the previous session and at 6046.30 two days ago.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for FTSE 100. Out of 128 times, FTSE closed higher 51.56% 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 58.59% with an average market move of 0.19%.
With three out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are TECDAX losing -1.18% and DAX closing -0.36% lower. On the flipside the best performers have been CAC closing 0.28% higher and N100 gaining 0.2%. Read more