ALU.AX closes above its opening price after recovering from early selling pressure
Altium Limited (ALU.AX) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
ALU.AX finished the week -3.36% lower at 21.89 after gaining $0.38 (1.77%) today on low volume, strongly outperforming the ASX 200 (0.42%). Trading up to $0.29 lower after the open, Altium Limited managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (ALU.AX as at Dec 07, 2018):
Friday's trading range has been $0.44 (2.01%), that's below the last trading month's daily average range of $0.84. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ALU.AX.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving lower in the prior session, the share managed to close higher but below the previous day's open, forming a bullish Harami Candle. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top and the Takuri Line which are both known as bullish patterns. The last time a Takuri Line showed up on April 12th, ALU.AX gained 1.10% on the following trading day.
After trading down to 21.55 earlier during the day, the stock bounced off the key technical support level at 21.77 (S1). The failure to close below the support could increase that levels importance as support going forward.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Selling might speed up should prices move below the nearby swing low at 21.32 where further sell stops could get triggered. Further selling might move prices lower should the market test November's close-by low at 20.30.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Spinning Top" stand out. Its common bullish interpretation has been confirmed for Altium Limited. Out of 96 times, ALU.AX closed higher 56.25% 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 61.46% with an average market move of 2.48%.