DGE.L closes within previous day's range
Diageo (DGE.L) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
DGE.L finished the week -5.19% lower at 2541.00 after gaining £17.50 (0.69%) today, outperforming the FTSE 100 (-0.16%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (DGE.L as at Oct 12, 2018):
Friday's trading range has been £37.00 (1.47%), that's slightly below the last trading month's daily average range of £40.80. 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 DGE.L.
After having been unable to move lower than 2521.00 in the prior session, the stock found buyers again around the same price level today at 2519.50. The last time this happened on Monday, DGE.L actually lost -0.46% 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 although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 2672.42.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the two 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. While it is usually interpreted as bearish, it has actually shown to be bullish for Diageo. Out of 101 times, DGE.L closed higher 56.44% 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 60.40% with an average market move of 0.89%.