NKY breaks below Tuesday's low
Nikkei 225 Index (NKY) Technical Analysis Report for Jul 01, 2020 | by Techniquant Editorial Team
NKY finished Wednesday at 22121.73 losing ¥166.41 (-0.75%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 22273.38, the stock index confirmed its breakout through the prior session low after trading up to ¥233.82 below it intraday.
Daily Candlestick Chart (NKY as at Jul 01, 2020):
Wednesday's trading range has been ¥320.75 (1.44%), that's slightly below the last trading month's daily average range of ¥334.82. 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.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on Monday, NKY actually gained 1.33% on the following trading day.
The index 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 22448.30 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. Further selling could move prices lower should the market test June's nearby low at 21529.83.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Nikkei 225. Out of 39 times, NKY closed higher 61.54% 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 64.10% with an average market move of 1.44%.
With three out of the other five Major World Indices closing lower today, the ones that stand out on the negative side are DAX losing -0.41% and DJIA closing -0.3% lower. On the flipside the best performers have been NDX closing 1.21% higher and SPX gaining 0.5%. Read more