JSE40 still stuck within tight trading range
JSE Top 40 USD Net Index (JSE40) Technical Analysis Report for Apr 16, 2019 | by Techniquant Editorial Team
JSE40 finished Tuesday at 4015.99 gaining $31.55 (0.79%). The bulls were in full control today, moving the market higher throughout the whole session. 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 (JSE40 as at Apr 16, 2019):
Tuesday's trading range has been $45.29 (1.14%), that's below the last trading month's daily average range of $59.92. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently just the same than usual for JSE40. Prices continued to consolidate within a tight trading range between 3949.56 and 4038.69 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Bearish Hikkake Pattern.
Prices are trading close to the key technical resistance level at 4038.69 (R1). JSE 40 ran into sellers again today around 4026.60 for the third trading day in a row after having found sellers at 4026.25 in the prior session and at 4036.34 two days ago. The last time this happened on April 12th, JSE40 lost -0.92% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 4038.69 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 3954.65 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous two Highs" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for JSE 40. Out of 15 times, JSE40 closed higher 66.67% 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 60.00% with an average market move of 1.31%.