SSE closes within prior day's range after lackluster session
SSE Composite Index (SSE) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
SSE finished the week 1.43% higher at 2917.01 after gaining CN¥10.94 (0.38%) today. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SSE as at Feb 14, 2020):
Friday's trading range has been CN¥27.37 (0.94%), that's below the last trading month's daily average range of CN¥43.20. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for SSE. Prices continued to consolidate within a tight trading range between 2892.42 and 2935.41 where it has been caught now for the last three trading days.
One bullish candlestick pattern matches today's price action, the White Candle.
Unable to break through the key technical resistance level at 2925.02 (R1), the index closed below it after spiking up to 2926.94 earlier during the day. The failure to close above the resistance might increase that levels importance going forward. When prices bounced off a significant resistance level the last time on January 22nd, SSE lost -2.75% on the following trading day. After having been unable to move lower than 2901.24 in the prior session, the market found buyers again around the same price level today at 2899.57.
The stock 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 2935.41 where further buy stops might get activated.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "White Candle" stand out. Its common bullish interpretation has been confirmed for SSE Index. Out of 703 times, SSE closed higher 54.91% 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 56.19% with an average market move of 0.25%.