EZJ.L runs into sellers around 1166.50 for the forth day in a row
easyJet plc (EZJ.L) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
EZJ.L ended the week 5.24% higher at 1165.00 after gaining £23.00 (2.01%) today, notably outperforming the FTSE 100 (-0.36%). Today's close at 1165.00 marks the highest recorded closing price since November 27, 2018. Trading up to £10.50 lower after the open, easyJet managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on January 4th, EZJ.L actually lost -0.63% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EZJ.L as at Jan 11, 2019):
Friday's trading range has been £27.50 (2.39%), that's below the last trading month's daily average range of £38.88. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for EZJ.L. Prices continued to consolidate within a tight trading range between 1129.50 and 1170.00 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, 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 share managed to close back above the 50-day moving average at 1145.22. Prices are trading close to the key technical resistance level at 1180.00 (R1). The stock was sold again around 1166.50 after having seen highs at 1167.00, 1170.00 and 1163.50 in the last three trading sessions. Obviously there is something going on at that level.
Crossing above the upper Bollinger Band for the first time since Wednesday, prices have shown unusually strong upward momentum in the short-term. This might either indicate a potential buying climax after which prices could head back down towards the mean of the Bollinger Bands at 1102.52 or signal the beginning of a strong momentum breakout leading to even higher prices.
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 1170.00 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 1129.50 where further sell stops might get activated.
Among the 14 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for easyJet. Out of 150 times, EZJ.L closed higher 53.33% 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 60.67% with an average market move of 1.37%.