TAIEX closes higher for the 3rd day in a row
Taiwan Capitalization Weighted Index (TAIEX) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, TAIEX ended Wednesday at 12976.76 gaining $131.11 (1.02%). Today's close at 12976.76 marks the highest recorded closing price ever. Trading $31.87 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (TAIEX as at Sep 16, 2020):
Wednesday's trading range has been $72.96 (0.56%), that's below the last trading month's daily average range of $149.31. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TAIEX.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After trading down to 12948.72 earlier during the day, Taiwan Index bounced off the key technical support level at 12971.87 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on August 20th, TAIEX gained 1.98% on the following trading day.
Crossing above the upper Bollinger Band for the first time since July 30th, prices have shown unusually strong upward momentum in the short-term. This could either indicate a potential buying climax after which prices might head back down towards the mean of the Bollinger Bands at 12698.85 or signal the beginning of a strong momentum breakout leading to even higher prices.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 13031.70, upside momentum could accelerate should the index be able to break out to new highs for the year.
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 299 times, TAIEX closed higher 63.88% 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 61.87% with an average market move of 0.60%.