NKY closes lower for the 3rd day in a row
Nikkei 225 Index (NKY) Technical Analysis Report for Oct 28, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, NKY ended Wednesday at 23418.51 losing ¥67.29 (-0.29%). 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 (NKY as at Oct 28, 2020):
Wednesday's trading range has been ¥116.80 (0.5%), that's below the last trading month's daily average range of ¥168.22. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for NKY.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar.
Prices are trading close to the key technical support level at 23382.67 (S1).
Although the stock index is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the close-by swing high at 23587.90 where further buy stops could get triggered. Selling might speed up should prices move below the nearby swing low at 23232.31 where further sell stops could get activated. As prices are trading close to October's high at 23725.58, upside momentum might accelerate should the Nikkei mark new highs for the month.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "RSI(2) below 20" stand out. Its common bullish interpretation has been confirmed for Nikkei 225. Out of 247 times, NKY closed higher 53.85% 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 59.11% with an average market move of 0.39%.
With six out of the other six Major World Indices closing lower today, the ones that stand out on the negative side are DAX losing -4.17% and NDX closing -3.93% lower. None of the markets managed to end the day in the green. Read more