NKY breaks back below 20-day moving average
Nikkei 225 Index (NKY) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
NKY finished Thursday at 18664.60 losing ¥882.03 (-4.51%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (NKY as at Mar 26, 2020):
Thursday's trading range has been ¥727.48 (3.78%), that's slightly below the last trading month's daily average range of ¥757.28. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for NKY.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. After moving higher in the previous session, Nikkei 225 closed lower but above the prior day's open today, forming a bearish Harami Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
The index closed back below the 20-day moving average at 19207.69. After having been unable to move lower than 18446.80 in the previous session, the Nikkei found buyers again around the same price level today at 18512.81. The last time this happened on Monday, NKY gained 7.13% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the five 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 354 times, NKY closed higher 59.89% 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 58.19% with an average market move of 0.63%.
With five out of the other six Major World Indices closing higher today, the ones that stand out on the positive side are DJIA gaining 6.38% and SPX closing 6.24% higher. On the flipside the worst performer has been HSI closing -0.74% lower. Read more