GEM.AX ends the day on a bullish note closing near the high of the day
G8 Education Limited (GEM.AX) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
GEM.AX finished the week 0.98% higher at 2.06 after gaining $0.04 (1.98%) today, significantly outperforming the market (ASX 200, 0.2%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (GEM.AX as at Oct 12, 2018):
Friday's trading range was $0.07 (3.5%), that's above last trading month's daily average range of $0.06. Things look different on a weekly scale, where volatility is slightly below the markets average with the monthly volatility being slightly below average. Prices continued to consolidate within a tight trading range between 1.97 and 2.07 which it has been in now for the last trading week.
Even with a weak opening G8 Education managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this happened on October 10th, GEM.AX lost -2.42% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Tweezer Bottom and the White Candle which are both known as bullish patterns.
Breaking through the key resistance level at 2.03 today, it is now likely to act as support going forward. The market ran into sellers again today around 2.06 for the third trading day in a row after having found sellers at 2.07 in the previous session and at 2.07 two days ago.
While the share is experiencing a short-term up trend, this might just be a correction, as both the medium and long term trends are still in negative territory.
Buying could speed up should prices move above the nearby swing high at 2.09 where further buy stops might get activated. Further buying could move prices higher should the market test September's close-by high at 2.10.
Among the 11 market conditions that our engine recognized today, the statistics for the Support/Resistance based condition "Close to S1 Support" stands out. It's common interpretation of being bullish has so far been confirmed for G8 Education in the past. Out of 635 times during the last ten years, GEM.AX closed higher 49.45% of the time on the next trading day. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 53.39% with an average market move of 0.73%.