JSE40 runs into sellers again around 2540.99
JSE Top 40 USD Net Index (JSE40) Technical Analysis Report for Mar 27, 2020 | by Techniquant Editorial Team
JSE40 finished the week 7.5% higher at 2394.74 after losing $164.03 (-6.41%) today. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 2410.58, JSE 40 confirmed its breakout through the prior session low after trading up to $40.69 below it intraday.
Daily Candlestick Chart (JSE40 as at Mar 27, 2020):
Friday's trading range has been $171.10 (6.75%), that's slightly above the last trading month's daily average range of $170.96. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for JSE40.
One bearish candlestick pattern matches today's price action, the Black Candle. The last time a Black Candle showed up on Monday, JSE40 actually gained 8.87% on the following trading day.
Prices are trading close to the key technical support level at 2332.38 (S1). After having been unable to move above 2563.31 in the previous session, the stock index ran into sellers again around the same price level today, failing to move higher than 2540.99.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Its common bearish interpretation has been confirmed for JSE 40. Out of 161 times, JSE40 closed lower 54.66% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 53.42% with an average market move of -0.83%.