RR.L runs into sellers again around 881.20
Rolls-Royce Holdings (RR.L) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
RR.L finished the week -8.79% lower at 875.80 after gaining £4.20 (0.48%) today, outperforming the FTSE 100 (-0.16%). Trading £4.40 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on October 5th, RR.L lost -3.98% on the following trading day. 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 (RR.L as at Oct 12, 2018):
Friday's trading range has been £9.20 (1.05%), that's below the last trading month's daily average range of £17.38. 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 RR.L.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
After having been unable to move above 880.20 in the previous session, the stock ran into sellers again around the same price level today, failing to move higher than 881.20.
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 while might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 961.62.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling might accelerate should prices move below the nearby swing low at 866.60 where further sell stops could get triggered.
Among the five 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 Rolls-Royce Holdings. Out of 121 times, RR.L closed higher 53.72% 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 58.68% with an average market move of 2.00%.