TME.AX pops to highest close since October 4th
Trade Me Group Foreign Exempt NZX (TME.AX) Technical Analysis Report for Nov 09, 2018 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, TME.AX finished the week 6.26% higher at 4.75 after gaining $0.05 (1.06%) today, notably outperforming the ASX 200 (-0.11%). Today's close at 4.75 marks the highest recorded closing price since October 4th. Closing above Thursday's high at 4.72, Trade Me confirmed its breakout through the prior session high after trading up to $0.06 above it intraday.
Daily Candlestick Chart (TME.AX as at Nov 09, 2018):
Friday's trading range has been $0.10 (2.12%), that's slightly above the last trading month's daily average range of $0.10. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TME.AX.
After trading down to 4.68 earlier during the day, the share bounced off the key technical support level at 4.69 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on Tuesday, TME.AX gained 2.01% on the following trading day. Prices are trading close to the key technical resistance level at 4.83 (R1).
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 while could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 4.49.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
With prices trading close to this year's high at 4.94, upside momentum could accelerate should the stock be able to break out to new highs for the year. Further buying might move prices higher should the market test October's nearby high at 4.84.
Among the four 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. Though it is usually interpreted as bullish, it has actually shown to be bearish for Trade Me. Out of 117 times, TME.AX closed lower 49.57% 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 57.26% with an average market move of -1.11%.