NKY closes above its opening price after recovering from early selling pressure
Nikkei 225 Index (NKY) Technical Analysis Report for Oct 10, 2019 | by Techniquant Editorial Team
NKY ended Thursday at 21551.98 gaining ¥95.60 (0.45%). Trading up to ¥147.39 lower after the open, the stock index managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Wednesday's high at 21467.77, the market confirmed its breakout through the prior session high after trading up to ¥133.69 above it intraday.
Daily Candlestick Chart (NKY as at Oct 10, 2019):
Thursday's trading range has been ¥292.58 (1.36%), that's far above the last trading month's daily average range of ¥154.58. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently notably lower than usual for NKY. Prices continued to consolidate within a tight trading range between 21276.01 and 21629.24 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. The last time this happened on September 4th, NKY gained 2.12% on the following trading day.
Buyers managed to take out the key technical resistance level at 21474.30 (now S1), which is likely to act as support going forward. Prices are trading close to the key technical resistance level at 21720.14 (R1).
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could accelerate should prices move above the close-by swing high at 21629.24 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Its common bullish interpretation has been confirmed for Nikkei 225. Out of 166 times, NKY closed higher 55.42% 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 54.82% with an average market move of 0.32%.
With six out of the other six Major World Indices closing higher today, the ones that stand out on the positive side are NDX gaining 0.65% and SPX closing 0.64% higher. None of the markets ended the day in the red. Read more