CBA.AX drops to lowest close since February 20th
Commonwealth Bank (CBA.AX) Technical Analysis Report for Mar 15, 2019 | by Techniquant Editorial Team
Moving lower for the 7th day in a row, CBA.AX finished the week -1.19% lower at 72.31 after losing $0.62 (-0.85%) today, underperforming the ASX 50 (-0.09%). Today's close at 72.31 marks the lowest recorded closing price since February 20th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 72.51, the share confirmed its breakout through the prior session low after trading up to $0.48 below it intraday.
Daily Candlestick Chart (CBA.AX as at Mar 15, 2019):
Friday's trading range has been $1.31 (1.79%), that's far above the last trading month's daily average range of $0.88. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CBA.AX.
One bearish candlestick pattern matches today's price action, the Black Candle.
The stock closed below the 50-day moving average at 72.63 for the first time since February 18th. When this moving average was crossed below the last time on February 13th, CBA.AX lost -0.87% on the following trading day. After having been unable to move above 73.39 in the previous session, the market ran into sellers again around the same price level today, failing to move higher than 73.34.
While Commonwealth Bank is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "7 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Commonwealth Bank. Out of 7 times, CBA.AX closed higher 85.71% 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 100.00% with an average market move of 4.89%.