NDAQ finds buyers again around 79.09
Nasdaq Inc. (NDAQ) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
NDAQ ended the week -6.44% lower at 80.02 after gaining $0.37 (0.46%) today, underperforming the S&P 500 (1.42%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (NDAQ as at Oct 12, 2018):
Friday's trading range has been $3.79 (4.57%), that's far above the last trading month's daily average range of $1.68. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for NDAQ.
One bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 78.97 (S1). After having been unable to move lower than 78.97 in the prior session, the market found buyers again around the same price level today at 79.09. The last time this happened on October 4th, NDAQ actually lost -0.35% 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 although could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 86.33.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling could speed up should prices move below the close-by swing low at 78.97 where further sell stops might get triggered.
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 NASDAQ OMX. Out of 116 times, NDAQ closed higher 60.34% 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 56.90% with an average market move of 1.31%.