HEN3.DE closes lower for the 5th day in a row
Henkel AG & Co. KGaA (HEN3.DE) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 5th day in a row, HEN3.DE ended the week -5.89% lower at 94.58 after edging lower €0.04 (-0.04%) today, but still slightly outperforming the DAX (-0.13%). Today's close at 94.58 marks the lowest recorded closing price since March 11, 2016. Trading €0.84 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (HEN3.DE as at Oct 12, 2018):
Friday's trading range has been €1.34 (1.41%), that's slightly below the last trading month's daily average range of €1.52. 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 significantly higher than usual for HEN3.DE.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 94.34 (S1). After having been unable to move lower than 94.34 in the previous session, Henkel found buyers again around the same price level today at 94.44. The last time this happened on October 1st, HEN3.DE actually lost -0.15% 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 though might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 101.13.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might accelerate should prices move below the nearby swing low at 94.34 where further sell stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Henkel. Out of 402 times, HEN3.DE closed higher 54.73% 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 59.45% with an average market move of 0.90%.