RUI runs into sellers around 1436.99 for the third day in a row
Russell 1000 Index (RUI) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
RUI ended the week 2.76% higher at 1436.99 after edging lower $0.11 (-0.01%) today. Trading up to $9.63 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 within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (RUI as at Jan 11, 2019):
Friday's trading range has been $10.09 (0.7%), that's far below the last trading month's daily average range of $31.77. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for RUI. Prices continued to consolidate within a tight trading range between 1417.96 and 1437.58 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji.
Prices are trading close to the key technical resistance level at 1453.33 (R1). The Russell ran into sellers again today around 1436.99 for the third trading day in a row after having found sellers at 1437.58 in the prior session and at 1435.49 two days ago. The last time this happened on January 3rd, RUI actually gained 3.44% on the following trading day.
While the market is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the nearby swing high at 1437.58 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 1417.96 where further sell stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Russell 1000. Out of 63 times, RUI closed higher 63.49% 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 60.32% with an average market move of 0.77%.