NDX misses to close above 50-day moving average
Nasdaq 100 Index (NDX) Technical Analysis Report for May 15, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NDX ended Wednesday at 7503.25 gaining $101.37 (1.37%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Tuesday's high at 7449.03, the market confirmed its breakout through the prior session high after trading up to $75.19 above it intraday.
Daily Candlestick Chart (NDX as at May 15, 2019):
Wednesday's trading range has been $170.32 (2.32%), that's far above the last trading month's daily average range of $100.15. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NDX.
Even with a weak opening the index managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on October 9, 2018, NDX actually lost -4.44% on the following trading day. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After spiking up to 7524.22 during the day, Nasdaq 100 found resistance at the 50-day moving average at 7510.45. After having been unable to move lower than 7337.94 in the prior session, the stock index found buyers again around the same price level today at 7353.90.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and might now be heading back up towards the mean of the Bollinger Bands at 7685.76.
While Nasdaq 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 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 50" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Nasdaq 100. Out of 18 times, NDX closed higher 77.78% 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 61.11% with an average market move of 0.56%.
With six out of the other six Major World Indices closing higher today, the ones that stand out on the positive side are DAX gaining 0.9% and FTSE closing 0.77% higher. None of the markets ended the day in the red. Read more