NDAQ closes below its opening price unable to hold early session gains
Nasdaq Inc. (NDAQ) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
NDAQ finished Wednesday at 127.30 losing $0.86 (-0.67%), slightly underperforming the S&P 500 (-0.46%). Trading $1.76 higher after the open, Nasdaq 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 missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (NDAQ as at Sep 16, 2020):
Wednesday's trading range has been $2.72 (2.12%), that's slightly above the last trading month's daily average range of $2.66. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for NDAQ. Prices continued to consolidate within a tight trading range between 126.23 and 129.86 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar.
Prices are trading close to the key technical support level at 126.22 (S1). After spiking up to 129.86 during the day, the stock found resistance at the 50-day moving average at 129.56. The last time this happened on March 3rd, NDAQ actually gained 5.72% on the following trading day. After having been unable to move lower than 127.29 in the prior session, the market found buyers again around the same price level today at 127.14.
While the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 129.92 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 124.72 where further sell stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Nasdaq. Out of 131 times, NDAQ closed higher 63.36% 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 57.25% with an average market move of 0.59%.