SPK.AX runs into sellers again around 3.95
Spark New Zealand Foreign Exempt NZX (SPK.AX) Technical Analysis Report for Jan 11, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, SPK.AX finished the week -0.51% lower at 3.94 after edging higher $0.01 (0.25%) today, outperforming the ASX 200 (-0.36%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (SPK.AX as at Jan 11, 2019):
Friday's trading range has been $0.03 (0.77%), that's far below the last trading month's daily average range of $0.07. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for SPK.AX. Prices continued to consolidate within a tight trading range between 3.89 and 3.95 where it has been caught now for the whole last trading week.
Even with a weak opening the market managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on December 20, 2018, SPK.AX actually lost -1.24% on the following trading day. Additionally, two candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns.
Prices are trading close to the key technical support level at 3.90 (S1). After having been unable to move above 3.95 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 3.95.
Although the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 3.89 where further sell stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Spark New. Out of 39 times, SPK.AX closed lower 51.28% 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 56.41% with an average market move of -0.57%.