NKY closes below its opening price unable to hold early session gains
Nikkei 225 Index (NKY) Technical Analysis Report for May 20, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, NKY finished Monday at 21301.73 gaining ¥51.64 (0.24%). Trading ¥124.09 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (NKY as at May 20, 2019):
Monday's trading range has been ¥147.41 (0.69%), that's below the last trading month's daily average range of ¥202.61. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NKY.
One neutral candlestick pattern matches today's price action, the Doji.
Prices are trading close to the key technical support level at 21198.99 (S1). After having been unable to move above 21398.85 in the previous session, the index ran into sellers again around the same price level today, failing to move higher than 21430.06. The last time this happened on May 16th, NKY actually gained 0.89% on the following trading day.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Close near low of period" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Nikkei 225. Out of 545 times, NKY closed higher 56.51% 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 57.25% with an average market move of 0.63%.
With six out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are NDX losing -1.69% and DAX closing -1.61% lower. None of the markets managed to end the day in the green. Read more