WPP.L declines to lowest close since June 24, 2013
WPP plc (WPP.L) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 7th day in a row, WPP.L ended the week -6.58% lower at 1058.50 after losing £6.50 (-0.61%) today on high volume, slightly underperforming the FTSE 100 (-0.16%). Today's close at 1058.50 marks the lowest recorded closing price since June 24, 2013. The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (WPP.L as at Oct 12, 2018):
Friday's trading range has been £21.00 (1.96%), that's slightly below the last trading month's daily average range of £24.68. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for WPP.L.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on Monday, WPP.L lost -1.35% on the following trading day.
Prices are trading close to the key technical support level at 1053.00 (S1). After having been unable to move above 1077.50 in the prior session, WPP plc ran into sellers again around the same price level today, missing to move higher than 1079.50.
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 although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 1126.30.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Selling might accelerate should prices move below the close-by swing low at 1053.00 where further sell stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for WPP plc. Out of 558 times, WPP.L closed higher 53.23% 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 53.94% with an average market move of 0.51%.