BA.L finds buyers again around 580.80
BAE Systems (BA.L) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
BA.L finished the week -4.85% lower at 584.20 after gaining £2.00 (0.34%) today on high volume, slightly outperforming the FTSE 100 (-0.16%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (BA.L as at Oct 12, 2018):
Friday's trading range has been £9.20 (1.58%), that's slightly below the last trading month's daily average range of £9.28. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for BA.L.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After having been unable to move lower than 581.00 in the previous session, the market found buyers again around the same price level today at 580.80. The last time this happened on Tuesday, BA.L actually lost -2.02% on the following trading day.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 615.95.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for BAE Systems. Out of 123 times, BA.L closed higher 58.54% 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 53.66% with an average market move of 1.03%.