NKY closes below its opening price unable to hold early session gains
Nikkei 225 Index (NKY) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
NKY finished the month 1.88% higher at 22288.14 after gaining ¥293.10 (1.33%) today. Trading ¥113.20 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on June 25th, NKY actually gained 1.13% on the following trading day. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (NKY as at Jun 30, 2020):
Tuesday's trading range has been ¥174.92 (0.78%), that's below the last trading month's daily average range of ¥336.59. 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 are trading close to the key technical resistance level at 22589.14 (R1).
The Nikkei shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 22589.14 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 21969.59 where further sell stops might get triggered.
Among the four 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. While it is usually interpreted as bearish, it has actually shown to be bullish for Nikkei 225. Out of 522 times, NKY closed higher 56.32% 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 58.24% with an average market move of 0.67%.
With five out of the other six Major World Indices closing higher today, the ones that stand out on the positive side are NDX gaining 1.96% and SPX closing 1.54% higher. On the flipside the worst performer has been FTSE closing -0.9% lower. Read more