SOL.AX ends the day on a bearish note closing near the low of the day
Soul Pattinson (W.H) (SOL.AX) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, SOL.AX ended the week -7.78% lower at 25.73 after losing $0.54 (-2.06%) today, significantly underperforming the market (ASX 200, 0.2%). Today's close at 25.73 marks the lowest recorded closing price since October 2nd. Trading $0.29 higher after the open, Soul Pattinson 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 2nd, SOL.AX gained 3.09% on the following trading day. Closing below Thursday's low at 25.81, the market confirms its breakout through the previous session's low having traded $0.19 below it intraday. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (SOL.AX as at Oct 12, 2018):
Friday's trading range was $0.57 (2.2%), that's below last trading month's daily average range of $0.78. Things look different on a weekly scale, where volatility is slightly above the markets average with the monthly volatility being way above average.
After trading as low as 25.62 during the day, the share bounced off the key support level at 25.72. The failure to close below the support might increase that levels importance as support going forward.
Although the stock is currently in a short-term down trend, this could just be a correction, as the medium and long term trends are both positive. SOL.AX broke below the 20-day moving average at 25.90 today for the first time since September 20th.
As prices are trading close to October's low at 25.46, downside momentum might speed up should Soul Pattinson mark new lows for the month.
Among the eight market conditions that our engine recognized today, the statistics for the Support/Resistance based condition "Bearish Break through SMA 20" stands out. Though it is usually interpreted being bearish, it has actually shown to be bullish so far in the past for Soul Pattinson. Out of 185 times during the last ten years, SOL.AX closed higher 52.43% of the time on the next trading day. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.24% with an average market move of 1.08%.