AAOI dominated by bears dragging the market lower throughout the day
Applied Optoelectronics Inc. (AAOI) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
AAOI finished the week 5.59% higher at 11.90 after tanking $0.85 (-6.67%) today, strongly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. This is the biggest single-day loss in over two weeks. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 12.06, Applied Optoelectronics confirmed its breakout through the previous session low after trading up to $0.25 below it intraday.
Daily Candlestick Chart (AAOI as at Feb 14, 2020):
Friday's trading range has been $0.89 (7.01%), that's above the last trading month's daily average range of $0.73. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AAOI.
Two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
The stock closed back below the 50-day moving average at 12.11. When this moving average was crossed below the last time on February 6th, AAOI lost -2.68% on the following trading day.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Belt-hold" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Applied Optoelectronics. Out of 10 times, AAOI closed higher 70.00% 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 50.00% with an average market move of 2.21%.