DLG.L unable to break through key resistance level

Direct Line Insurance Group PLC (DLG.L) Technical Analysis Report for Apr 16, 2018

Highlights

DLG.L dominated by bears dragging the market lower throughout the day
DLG.L breaks below 200-day moving average
DLG.L unable to break through key resistance level
DLG.L fails to close above 20-day moving average
DLG.L ends the day on a bearish note closing near the low of the day

TQ Sentiment

Report Sentiment: 80% Bearish
Technical Forecast:

Overview

DLG.L finished Monday at 357.00 losing £3.10 (-0.86%) on low volume. The bears were in full control today, moving the market lower throughout the whole session. Closing below Friday's low at 357.60, the share confirms its breakout through the prior session's low having traded £0.65 below it intraday. Ending with a weak close near the low of the day sets a bearish note for the next session.

Daily chart for DLG.L

Volatility

Monday's trading range was £5.35 (1.48%), that's slightly below last trading month's daily average range of £5.97. Things look different on a weekly scale, where volatility is below the markets average with the monthly volatility being above average.

Price Action

In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. In spite of a strong opening the market closed below the previous day's open and close, forming a bearish Engulfing Candle.

Support/Resistance

Prices are trading close to a key support level at 353.90. Unable to break through the key technical resistance level at 362.00, Direct Line closed below it after spiking as high as 362.30 during the day. The failure to close above the resistance could increase that levels importance as resistance going forward. After having been unable to move lower than 357.60 in the prior session, the stock found buyers again around the same price level today at 356.95. After spiking up to 362.30 during the day, DLG.L found resistance at the 20-day moving average at 362.24.

Trend

While still in a long-term uptrend, the short and medium-term trends both turned bearish already. The share broke below the 200-day moving average at 359.56 today for the first time since April 5th.

Order Flow

With prices trading close to this year's low at 345.90, downside momentum might speed up should the market break out to new lows for the year.

Conclusion

While classical technical analysis indicates a bearish sentiment for the next trading day, our quantitative statistics show a different picture being very bullish.

Market Conditions for Direct Line Insurance Group PLC

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