TAIEX runs into sellers again around 9739.73
Taiwan Capitalization Weighted Index (TAIEX) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, TAIEX finished Thursday at 9736.36 edging higher $91.61 (0.95%). Trading up to $102.12 lower after the open, the index managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on March 13th, TAIEX actually lost -4.06% on the following trading day. Closing above Wednesday's high at 9722.37, the stock index confirmed its breakout through the prior session high after trading up to $17.36 above it intraday.
Daily Candlestick Chart (TAIEX as at Mar 26, 2020):
Thursday's trading range has been $174.71 (1.81%), that's below the last trading month's daily average range of $281.74. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for TAIEX.
After trading down to 9565.02 earlier during the day, Taiwan Index bounced off the key technical support level at 9636.15 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move above 9722.37 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 9739.73.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Taiwan Index. Out of 303 times, TAIEX closed higher 63.37% 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 61.39% with an average market move of 0.45%.