FTSE snaps to lowest close since April 6th
FTSE 100 Index (FTSE) Technical Analysis Report for Oct 28, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, FTSE ended Wednesday at 5582.80 tanking £146.20 (-2.55%). This is the biggest single-day loss in over a month. The last time we've seen such an unusually strong single-day loss on October 21st, FTSE actually gained 0.16% on the following trading day. Today's close at 5582.80 marks the lowest recorded closing price since April 6th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 5728.20, FTSE 100 confirmed its breakout through the previous session low after trading up to £202.68 below it intraday.
Daily Candlestick Chart (FTSE as at Oct 28, 2020):
Wednesday's trading range has been £203.47 (3.55%), that's far above the last trading month's daily average range of £87.69. 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 FTSE.
One bearish candlestick pattern matches today's price action, the Black Candle.
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 though could signal a potential change in momentum that might lead to a correction back up towards the center of the Bollinger Bands at 5878.70.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the seven 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. While it is usually interpreted as bearish, it has actually shown to be bullish for FTSE 100. Out of 189 times, FTSE closed higher 52.91% 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 63.49% with an average market move of 0.44%.
With five out of the other five Major European Indices closing lower today, the ones that stand out on the negative side are DAX losing -4.17% and CAC closing -3.37% lower. None of the markets managed to end the day in the green. Read more