AAL breaks below Thursday's low
American Airlines Group Inc. (AAL) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
AAL finished the week 7.3% higher at 9.70 after losing $0.19 (-1.92%) today on low volume, significantly underperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 9.83, the stock confirmed its breakout through the prior session low after trading up to $0.20 below it intraday.
Daily Candlestick Chart (AAL as at May 22, 2020):
Friday's trading range has been $0.49 (4.89%), that's below the last trading month's daily average range of $0.73. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AAL.
Regardless of a strong opening American Airlines closed below the previous day's open and close, forming a bearish Engulfing Candle. Additionally, two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns.
The share was sold again around 10.12 after having seen highs at 10.15, 10.14 and 10.19 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on July 25, 2018, AAL actually gained 4.79% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 10.15 where further buy stops might get triggered.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for American Airlines. Out of 9 times, AAL closed higher 66.67% 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 four trading days, showing a win rate of 55.56% with an average market move of 0.60%.