NDX still stuck within tight trading range
Nasdaq 100 Index (NDX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NDX ended the week 2.86% higher at 9413.99 after edging higher $36.00 (0.38%) today ahead of tomorrow's Memorial Day market holiday. Trading up to $38.61 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. 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 (NDX as at May 22, 2020):
Friday's trading range has been $96.86 (1.03%), that's below the last trading month's daily average range of $160.52. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NDX. Prices continued to consolidate within a tight trading range between 9248.78 and 9515.05 where it has been caught now for the whole last trading week.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a White Candle showed up on Wednesday, NDX actually lost -1.13% on the following trading day.
After trading down to 9325.07 earlier during the day, the stock index bounced off the key technical support level at 9354.45 (S1). The failure to close below the support could increase that levels importance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 9515.05 where further buy stops could get triggered. With prices trading close to this year's high at 9736.57, upside momentum might accelerate should Nasdaq 100 be able to break out to new highs for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Nasdaq 100. Out of 385 times, NDX closed higher 60.78% 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 63.12% with an average market move of 0.73%.
With four out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are HSI losing -5.56% and NKY closing -0.8% lower. On the flipside the best performers have been SPX closing 0.24% higher and DAX gaining 0.07%. Read more