ADI finds buyers at key support level
Analog Devices Inc. (ADI) Technical Analysis Report for Sep 17, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ADI finished Thursday at 115.49 edging lower $0.07 (-0.06%), but still notably outperforming the Nasdaq 100 (-1.48%). The bulls were in full control today, moving the market higher throughout the whole session. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ADI as at Sep 17, 2020):
Thursday's trading range has been $3.03 (2.69%), that's slightly above the last trading month's daily average range of $2.59. 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 higher than usual for ADI.
One bullish candlestick pattern matches today's price action, the White Candle. The last time a White Candle showed up on September 2nd, ADI actually lost -3.87% on the following trading day.
After trading down to 112.60 earlier during the day, Analog Devices bounced off the key technical support level at 112.80 (S2). The failure to close below the support might increase that levels importance as support going forward. Prices are trading close to the key technical resistance level at 117.19 (R1).
While still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Buying could accelerate should prices move above the nearby swing high at 117.73 where further buy stops might get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S2" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Analog Devices. Out of 21 times, ADI closed lower 52.38% 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 57.14% with an average market move of -2.22%.