TAIEX tumbles -1.79% closing $197.16 lower
Taiwan Capitalization Weighted Index (TAIEX) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
TAIEX finished the week -0.03% lower at 10811.15 after tanking $197.16 (-1.79%) today. This is the biggest single-day loss in over two weeks. The last time we've seen such an unusually strong single-day loss on May 4th, TAIEX actually gained 0.50% on the following trading day. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 10933.21, the index confirmed its breakout through the previous session low after trading up to $128.65 below it intraday.
Daily Candlestick Chart (TAIEX as at May 22, 2020):
Friday's trading range has been $172.99 (1.58%), that's far above the last trading month's daily average range of $116.66. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for TAIEX.
Two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the close-by swing low at 10730.55 where further sell stops could get triggered. As prices are trading close to May's high at 11039.11, upside momentum might accelerate should the market mark new highs for the month. As prices are trading close to May's low at 10658.50, downside momentum could speed up should the stock index mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Taiwan Index. Out of 52 times, TAIEX closed higher 59.62% of the time on the next trading day after the market condition occurred.