NKY slides to lowest close since January 10th
Nikkei 225 Index (NKY) Technical Analysis Report for Feb 08, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, NKY finished the week -2.19% lower at 20333.17 after tanking ¥418.11 (-2.01%) today ahead of tomorrow's National Foundation Day market holiday. This is the biggest single-day loss in over a month. The last time we've seen such an unusually strong single-day loss on December 25, 2018, NKY actually gained 0.89% on the following trading day. Today's close at 20333.17 marks the lowest recorded closing price since January 10th. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (NKY as at Feb 08, 2019):
Friday's trading range has been ¥247.08 (1.2%), that's above the last trading month's daily average range of ¥201.72. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for NKY.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 20211.57 (S1). The index closed below the 20-day moving average at 20641.45 for the first time since January 17th.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Decisive Down Move" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Nikkei 225. Out of 369 times, NKY closed higher 58.54% 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 58.27% with an average market move of 0.93%.
With four out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are DAX losing -1.05% and FTSE closing -0.32% lower. On the flipside the best performers have been NDX closing 0.12% higher and SPX gaining 0.07%. Read more