JMAT.L closes below its opening price unable to hold early session gains
Johnson Matthey (JMAT.L) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
JMAT.L finished the week -7.88% lower at 3096.00 after edging higher £7.00 (0.23%) today, slightly outperforming the FTSE 100 (-0.16%). Trading £25.00 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 prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (JMAT.L as at Oct 12, 2018):
Friday's trading range has been £55.00 (1.77%), that's below the last trading month's daily average range of £77.50. 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 JMAT.L.
Two candlestick patterns are matching today's price action, the Homing Pigeon which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Homing Pigeon showed up on July 3rd, JMAT.L actually lost -1.60% 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 while could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 3461.40.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 2980.00, downside momentum could speed up should Johnson Matthey break out to new lows for the year.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Homing Pigeon" stand out. Its common bullish interpretation has been confirmed for Johnson Matthey. Out of 26 times, JMAT.L closed higher 57.69% 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 65.38% with an average market move of 2.28%.