NKY closes below its opening price unable to hold early session gains
Nikkei 225 Index (NKY) Technical Analysis Report for Jun 12, 2019 | by Techniquant Editorial Team
NKY finished Wednesday at 21129.72 losing ¥74.56 (-0.35%). Trading ¥129.31 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 previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (NKY as at Jun 12, 2019):
Wednesday's trading range has been ¥140.95 (0.67%), that's slightly below the last trading month's daily average range of ¥150.79. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for NKY. Prices continued to consolidate within a tight trading range between 21066.62 and 21259.70 where it has been caught now for the last three trading days.
After moving higher in the previous session, the Nikkei closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, four candlestick patterns are matching today's price action, the Gravestone Doji, the Northern Doji and the Shooting Star which are known as bearish patterns and one neutral pattern, the Doji. The last time a Shooting Star showed up on February 1st, NKY actually gained 0.46% on the following trading day.
Unable to break through the key technical resistance level at 21198.99 (R1), the market closed below it after spiking up to 21259.70 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
Nikkei 225 shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying could accelerate should prices move above the close-by swing high at 21297.70 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 21066.62 where further sell stops might get triggered.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Harami Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Nikkei 225. Out of 35 times, NKY closed higher 57.14% of the time on the next trading day after the market condition occurred.
With six out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are HSI losing -1.73% and NDX closing -0.55% lower. None of the markets managed to end the day in the green. Read more