AAL falls to lowest close since June 1st
American Airlines Group Inc. (AAL) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, AAL finished the month -14.92% lower at 11.12 after losing $0.06 (-0.54%) today, notably underperforming the Nasdaq 100 (1.78%). Today's close at 11.12 marks the lowest recorded closing price since June 1st. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (AAL as at Jul 31, 2020):
Friday's trading range has been $0.45 (4.03%), that's below the last trading month's daily average range of $0.72. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for AAL.
Two candlestick patterns are matching today's price action, the Takuri Line which is known as bullish pattern and one bearish pattern, the Bearish Spinning Top. The last time a Takuri Line showed up on July 6th, AAL actually lost -6.95% on the following trading day.
Unable to break through the key technical resistance level at 11.18 (R1), the stock closed below it after spiking up to 11.25 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
American Airlines shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might speed up should prices move above the nearby swing high at 12.00 where further buy stops could get activated. Further selling might move prices lower should the market test June's close-by low at 10.62.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Takuri Line" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for American Airlines. Out of 56 times, AAL closed lower 55.36% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 51.79% with an average market move of -0.74%.