LGEN.L closes below its opening price unable to hold early session gains
Legal & General (LGEN.L) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
LGEN.L ended the week -5.96% lower at 230.30 after gaining £0.70 (0.3%) today, underperforming the FTSE 100 (1.1%). Trading £1.50 higher after the open, the market 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 in a lackluster session.
Daily Candlestick Chart (LGEN.L as at Dec 07, 2018):
Friday's trading range has been £3.70 (1.59%), that's below the last trading month's daily average range of £6.34. 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 LGEN.L.
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 Homing Pigeon which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Homing Pigeon showed up on November 21st, LGEN.L actually lost -0.79% on the following trading day.
Crossing above the lower Bollinger Band, prices have lost at least some of their downward momentum in the short-term and could now be heading back up towards the mean of the Bollinger Bands at 245.03.
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 227.90 where further sell stops could get activated.
Among the six 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 Legal &. Out of 27 times, LGEN.L closed higher 59.26% 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 70.37% with an average market move of 0.92%.