PSON.L runs into sellers around 1030.00 for the third day in a row
Pearson plc (PSON.L) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving higher for the 10th day in a row, PSON.L ended the week 6.7% higher at 1027.50 after gaining £6.00 (0.59%) today on high volume, outperforming the FTSE 100 (-0.36%). Today's close at 1027.50 marks the highest recorded closing price since October 20, 2015. Trading up to £12.50 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 1026.50, the market confirmed its breakout through the prior session high after trading up to £3.50 above it intraday.
Daily Candlestick Chart (PSON.L as at Jan 11, 2019):
Friday's trading range has been £18.00 (1.76%), that's slightly below the last trading month's daily average range of £19.29. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for PSON.L. Prices continued to consolidate within a tight trading range between 1005.50 and 1030.00 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Hanging Man.
Unable to break through the key technical resistance level at 1028.00 (R1), Pearson plc closed below it after spiking up to 1030.00 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on Monday, PSON.L actually gained 2.95% on the following trading day. The share ran into sellers again today around 1030.00 for the third trading day in a row after having found sellers at 1026.50 in the previous session and at 1028.00 two days ago.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 954.92.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. Its common bullish interpretation has been confirmed for Pearson plc. Out of 152 times, PSON.L closed higher 54.61% 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 57.89% with an average market move of 0.71%.