IPL.AX breaks below key technical support level
Incitec Pivot (IPL.AX) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
IPL.AX finished Wednesday at 3.29 losing $0.06 (-1.79%) on high volume, significantly underperforming the ASX 50 (-0.44%). Trading $0.04 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (IPL.AX as at Feb 13, 2019):
Wednesday's trading range has been $0.11 (3.28%), that's far above the last trading month's daily average range of $0.08. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for IPL.AX.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on February 4th, IPL.AX actually gained 1.79% on the following trading day.
Prices broke below the key technical support level at 3.33 (now R1), which is likely to act as resistance going forward.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might speed up should prices move below the nearby swing low at 3.20 where further sell stops could get activated. 2018's low at 3.18 is within reach and we might see further downside momentum should Incitec Pivot break out beyond.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Incitec Pivot. Out of 89 times, IPL.AX closed higher 53.93% 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 62.92% with an average market move of 2.30%.