OSH.AX dominated by bears dragging the market lower throughout the day
Oil Search Ltd (OSH.AX) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
OSH.AX ended the week 5.99% higher at 7.61 after edging lower $0.02 (-0.26%) today, but still slightly outperforming the ASX 50 (-0.34%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (OSH.AX as at Jan 11, 2019):
Friday's trading range has been $0.11 (1.43%), that's far below the last trading month's daily average range of $0.16. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for OSH.AX.
Notwithstanding a strong opening Oil Search closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on Tuesday, OSH.AX actually gained 2.59% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 7.49 (S1).
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 7.18.
Although the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. Its common bearish interpretation has been confirmed for Oil Search. Out of 80 times, OSH.AX closed lower 53.75% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 55.00% with an average market move of -0.92%.