ADI finds buyers again around 90.88
Analog Devices Inc. (ADI) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
ADI ended Thursday at 92.62 losing $1.74 (-1.84%), significantly underperforming the Nasdaq 100 (5.72%). Trading $1.97 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 March 18th, ADI actually gained 9.84% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (ADI as at Mar 26, 2020):
Thursday's trading range has been $5.62 (5.95%), that's below the last trading month's daily average range of $7.73. 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 slightly lower than usual for ADI. Prices continued to consolidate within a tight trading range between 87.44 and 97.44 where it has been caught now for the last three trading days.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Regardless of a strong opening the market closed below the prior day's open and close, forming a bearish Engulfing Candle.
Prices are trading close to the key technical support level at 87.25 (S1). Prices are trading close to the key technical resistance level at 96.90 (R1). After having been unable to move lower than 89.74 in the previous session, Analog Devices found buyers again around the same price level today at 90.88.
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the close-by swing high at 97.44 where further buy stops could get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Analog Devices. Out of 81 times, ADI closed higher 62.96% 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 58.02% with an average market move of 0.73%.