CBOE breaks below key technical support level
Cboe Global Markets Inc. (CBOE) Technical Analysis Report for Jul 02, 2020 | by Techniquant Editorial Team
CBOE ended Thursday at 95.09 losing $1.37 (-1.42%), notably underperforming the S&P 500 (0.45%) ahead of tomorrow's Independence Day OBS market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (CBOE as at Jul 02, 2020):
Thursday's trading range has been $3.57 (3.65%), that's slightly above the last trading month's daily average range of $3.31. 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 slightly higher than usual for CBOE.
Two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns. The last time a Bearish Belt-hold showed up on June 4th, CBOE lost -3.16% on the following trading day.
Prices broke below the key technical support level at 95.85 (now R1), which is likely to act as resistance going forward. After having been unable to move above 97.39 in the previous session, Cboe Global ran into sellers again around the same price level today, failing to move higher than 97.79.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Black Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Cboe Global. Out of 477 times, CBOE closed higher 52.41% 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 60.80% with an average market move of 1.06%.