LSE.L unable to break through key resistance level
London Stock Exchange Group (LSE.L) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
LSE.L finished the week -3.97% lower at 3873.00 after edging higher £3.00 (0.08%) today on low volume, notably underperforming the FTSE 100 (1.1%). Trading £68.00 higher after the open, London 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 (LSE.L as at Dec 07, 2018):
Friday's trading range has been £91.00 (2.34%), that's slightly above the last trading month's daily average range of £78.30. 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 LSE.L.
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. Additionally, one bearish candlestick pattern matches today's price action, the Bearish Closing Marubozu. The last time a Bearish Closing Marubozu showed up on November 12th, LSE.L actually gained 1.06% on the following trading day.
Unable to break through the key technical resistance level at 3932.00 (R1), the market closed below it after spiking up to 3964.00 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
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 although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 4045.45.
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 3842.00 where further sell stops could get activated.
Among the six 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. Though it is usually interpreted as bearish, it has actually shown to be bullish for London Stock. Out of 134 times, LSE.L closed higher 51.49% 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 72.39% with an average market move of 3.27%.