AEP finds buyers around 84.93 for the third day in a row
American Electric Power Company Inc. (AEP) Technical Analysis Report for May 17, 2019 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, AEP ended the week 1.41% higher at 85.85 after gaining $0.45 (0.53%) today, notably outperforming the S&P 500 (-0.58%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (AEP as at May 17, 2019):
Friday's trading range has been $1.43 (1.68%), that's above the last trading month's daily average range of $1.18. 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 AEP. Prices continued to consolidate within a tight trading range between 84.76 and 86.36 where it has been caught now for the last three trading days.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
Buyers managed to take out the key technical resistance level at 85.60 (now S1), which is likely to act as support going forward. The last time this happened on Monday, AEP actually lost -0.90% on the following trading day. The market found buyers again today around 84.93 for the third trading day in a row after having found demand at 84.76 in the previous session and at 84.98 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the nearby swing high at 86.54 where further buy stops might get activated. Selling could accelerate should prices move below the close-by swing low at 84.76 where further sell stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior two Lows" stand out. Its common bullish interpretation has been confirmed for American Electric. Out of 148 times, AEP closed higher 57.43% 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 61.49% with an average market move of 0.99%.