AAP dominated by bulls lifting the market higher throughout the day
Advance Auto Parts Inc W/I (AAP) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, AAP finished Thursday at 97.12 gaining $6.75 (7.47%), significantly outperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 96.61, Advance Auto confirmed its breakout through the previous session high after trading up to $1.04 above it intraday.
Daily Candlestick Chart (AAP as at Mar 26, 2020):
Thursday's trading range has been $7.07 (7.73%), that's below the last trading month's daily average range of $8.96. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for AAP.
One bullish candlestick pattern matches today's price action, the White Candle.
After having been unable to move above 96.61 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 97.65. The last time this happened on March 20th, AAP actually gained 4.62% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Advance Auto. Out of 605 times, AAP closed higher 53.55% 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 57.36% with an average market move of 0.78%.