LSE.L closes below its opening price unable to hold early session gains
London Stock Exchange Group (LSE.L) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
LSE.L ended the week -9.2% lower at 4097.00 after gaining £20.00 (0.49%) today, outperforming the FTSE 100 (-0.16%). Trading £46.00 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on October 5th, LSE.L lost -1.82% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (LSE.L as at Oct 12, 2018):
Friday's trading range has been £65.00 (1.58%), that's slightly below the last trading month's daily average range of £76.45. 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 strongly higher than usual for LSE.L.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
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 could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 4531.35.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for London Stock. Out of 130 times, LSE.L closed higher 52.31% 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 72.31% with an average market move of 3.57%.