N100 closes below its opening price unable to hold early session gains
Euronext 100 (N100) Technical Analysis Report for Aug 10, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, N100 finished Monday at 973.11 edging higher €0.16 (0.02%). Trading €4.92 higher after the open, the stock index was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (N100 as at Aug 10, 2020):
Monday's trading range has been €10.55 (1.08%), that's slightly below the last trading month's daily average range of €13.59. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for N100.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top. The last time a Bearish Spinning Top showed up on June 18th, N100 actually gained 0.45% on the following trading day.
Prices are trading close to the key technical support level at 964.87 (S1).
Although Euronext is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 986.30 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 964.87 where further sell stops might get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Euronext. Out of 183 times, N100 closed higher 53.55% 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 seven trading days, showing a win rate of 63.39% with an average market move of 0.20%.
With four out of the other five Major European Indices closing higher today, the ones that stand out on the positive side are BEL20 gaining 0.45% and CAC closing 0.41% higher. On the flipside the worst performer has been TECDAX closing -0.95% lower. Read more