CBA.AX pops to highest close since September 28th
Commonwealth Bank (CBA.AX) Technical Analysis Report for Nov 09, 2018 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, CBA.AX ended the week 3.8% higher at 70.95 after gaining $0.33 (0.47%) today on low volume, outperforming the ASX 50 (-0.04%). Today's close at 70.95 marks the highest recorded closing price since September 28th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 70.64, the market confirmed its breakout through the previous session high after trading up to $0.31 above it intraday.
Daily Candlestick Chart (CBA.AX as at Nov 09, 2018):
Friday's trading range has been $0.60 (0.85%), that's far below the last trading month's daily average range of $1.10. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CBA.AX.
Two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns. The last time a Bullish Short Candle showed up on October 29th, CBA.AX gained 2.28% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 67.72.
Although Commonwealth Bank is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Trading close to September's high at 72.48 we could see further upside momentum if potential buy stops at the level get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for Commonwealth Bank. Out of 93 times, CBA.AX closed higher 56.99% 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 58.06% with an average market move of 0.11%.