LUMBER finds buyers at key support level
Lumber (LUMBER) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
LUMBER ended the week 2.4% higher at 451.5 after losing $4.3 (-0.94%) today. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (LUMBER as at Feb 14, 2020):
Friday's trading range has been $6.9 (1.53%), that's below the last trading month's daily average range of $10.2. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for LUMBER.
Three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji. The last time a Hanging Man showed up on January 31st, LUMBER lost -2.92% on the following trading day.
After trading down to 445.9 earlier during the day, the market bounced off the key technical support level at 451.3 (S1). The failure to close below the support might increase that levels significance as support going forward.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 434.0.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying might accelerate should prices move above the close-by swing high at 459.9 where further buy stops could get triggered. 2019's high at 471.1 is within reach and we might see further upside momentum should the contract manage to break out beyond.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Lumber. Out of 76 times, LUMBER closed higher 51.32% 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 59.21% with an average market move of 1.12%.
With four out of the other five Consumer Commodity Markets closing lower today, the ones that stand out on the negative side are SUGAR losing -1.56% and COCOA closing -0.83% lower. On the flipside the best performer has been COFFEE closing 4.23% higher. Read more