AEP breaks below key technical support level
American Electric Power Company Inc. (AEP) Technical Analysis Report for Oct 12, 2018 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, AEP ended the week -1.35% lower at 70.90 after losing $0.32 (-0.45%) today, strongly underperforming the S&P 500 (1.42%). Today's close at 70.90 marks the lowest recorded closing price since October 4th. Closing below Thursday's low at 70.91, the share confirmed its breakout through the previous session low after trading up to $0.60 below it intraday.
Daily Candlestick Chart (AEP as at Oct 12, 2018):
Friday's trading range has been $1.01 (1.42%), that's slightly below the last trading month's daily average range of $1.20. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AEP.
One bullish candlestick pattern matches today's price action, the Hammer. The last time a Hammer showed up on September 20th, AEP gained 0.45% on the following trading day.
Prices are trading close to the key technical support level at 70.12 (S1). Prices broke below the key technical support level at 70.97 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Further selling could move prices lower should the market test September's nearby low at 68.92.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hammer" stand out. Its common bullish interpretation has been confirmed for American Electric. Out of 22 times, AEP closed higher 54.55% 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 seven trading days, showing a win rate of 63.64% with an average market move of 0.38%.