AAL closes below its opening price unable to hold early session gains
American Airlines Group Inc. (AAL) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, AAL ended Thursday at 15.66 gaining $0.27 (1.75%), notably underperforming the Nasdaq 100 (5.72%). Trading $1.18 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Monday, AAL actually gained 35.80% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AAL as at Mar 26, 2020):
Thursday's trading range has been $2.07 (12.89%), that's slightly below the last trading month's daily average range of $2.29. 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 significantly lower than usual for AAL.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical support level at 14.46 (S1). Prices are trading close to the key technical resistance level at 17.51 (R1). After having been unable to move above 16.99 in the prior session, American Airlines ran into sellers again around the same price level today, failing to move higher than 17.24.
While the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for American Airlines. Out of 439 times, AAL closed higher 51.48% 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 55.13% with an average market move of 0.90%.