A2M.AX breaks below Thursday's low
The a2 Milk Company (A2M.AX) Technical Analysis Report for Nov 09, 2018 | by Techniquant Editorial Team
A2M.AX finished the week -2.9% lower at 9.70 after losing $0.04 (-0.41%) today on low volume, slightly underperforming the ASX 200 (-0.11%). Closing below Thursday's low at 9.72, the share confirmed its breakout through the prior session low after trading up to $0.15 below it intraday.
Daily Candlestick Chart (A2M.AX as at Nov 09, 2018):
Friday's trading range has been $0.19 (1.95%), that's far below the last trading month's daily average range of $0.36. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for A2M.AX.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on Wednesday, A2M.AX actually gained 1.67% on the following trading day.
Prices are trading close to the key technical support level at 9.46 (S1). Prices are trading close to the key technical resistance level at 9.91 (R1).
Although The a2 is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the nearby swing high at 9.91 where further buy stops might get triggered. Selling could accelerate should prices move below the close-by swing low at 9.32 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Though it is usually interpreted as neutral, it has actually shown to be bullish for The a2. Out of 234 times, A2M.AX closed higher 46.15% 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 61.11% with an average market move of 4.00%.