NDAQ still stuck within tight trading range
Nasdaq Inc. (NDAQ) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
NDAQ ended the week 2.91% higher at 115.34 after gaining $1.35 (1.18%) today on low volume, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 115.34 marks the highest recorded closing price since March 4th. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 114.70, the stock confirmed its breakout through the prior session high after trading up to $1.06 above it intraday.
Daily Candlestick Chart (NDAQ as at May 22, 2020):
Friday's trading range has been $1.87 (1.64%), that's far below the last trading month's daily average range of $2.86. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NDAQ. Prices continued to consolidate within a tight trading range between 112.42 and 115.99 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and one bearish pattern, the Bearish Hikkake Pattern. The last time a Bullish Short Candle showed up on April 16th, NDAQ gained 2.71% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might speed up should prices move above the nearby swing high at 115.99 where further buy stops could get triggered. Selling might accelerate should prices move below the close-by swing low at 112.42 where further sell stops could get activated. With prices trading close to this year's high at 120.23, upside momentum might speed up should Nasdaq be able to break out to new highs for the year. Trading close to March's high at 116.55 we could see further upside momentum if potential buy stops at the level get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for Nasdaq. Out of 764 times, NDAQ closed higher 51.31% 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 60.73% with an average market move of 0.87%.