TAIEX breaks above 20-day moving average for the first time since January 20th
Taiwan Capitalization Weighted Index (TAIEX) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, TAIEX ended the week 1.75% higher at 11815.70 after gaining $23.92 (0.2%) today. Trading up to $17.65 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Monday, TAIEX gained 0.78% on the following trading day. 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 (TAIEX as at Feb 14, 2020):
Friday's trading range has been $51.92 (0.44%), that's below the last trading month's daily average range of $126.91. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for TAIEX. Prices continued to consolidate within a tight trading range between 11693.40 and 11854.98 where it has been caught now for the last three trading days.
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. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
The stock index managed to close above the 20-day moving average at 11801.99 for the first time since January 20th. After having been unable to move lower than 11784.94 in the previous session, Taiwan Index found buyers again around the same price level today at 11788.87.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the close-by swing high at 11854.98 where further buy stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for Taiwan Index. Out of 136 times, TAIEX closed higher 55.15% 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 60.29% with an average market move of 0.03%.