JSE40 closes lower for the 2nd day in a row
JSE Top 40 USD Net Index (JSE40) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, JSE40 finished the month 4.38% higher at 3240.03 after losing $35.49 (-1.08%) today. Today's close at 3240.03 marks the lowest recorded closing price since July 7th. Closing below Thursday's low at 3264.61, JSE 40 confirmed its breakout through the previous session low after trading up to $33.14 below it intraday.
Daily Candlestick Chart (JSE40 as at Jul 31, 2020):
Friday's trading range has been $101.84 (3.08%), that's far above the last trading month's daily average range of $71.13. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for JSE40.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 3224.56 (S1). The index closed below the 200-day moving average at 3271.90 for the first time since July 14th. When this moving average was crossed below the last time on July 14th, JSE40 actually gained 2.35% on the following trading day.
Though JSE is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 200" stand out. Its common bearish interpretation has been confirmed for JSE 40. Out of 13 times, JSE40 closed lower 69.23% 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 53.85% with an average market move of -0.95%.