AIT closes above its opening price after recovering from early selling pressure
Applied Industrial Technologies Inc. (AIT) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, AIT ended the month 1.17% higher at 63.12 after edging lower $0.17 (-0.27%) today, notably underperforming the S&P 500 (0.77%). Trading up to $1.51 lower after the open, Applied Industrial managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AIT as at Jul 31, 2020):
Friday's trading range has been $2.05 (3.27%), that's far above the last trading month's daily average range of $1.46. 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 lower than usual for AIT.
One bullish candlestick pattern matches today's price action, the Takuri Line. The last time a Takuri Line showed up on March 13th, AIT actually lost -8.89% on the following trading day.
After trading as low as 61.27 during the day, the share found support at the 50-day moving average at 61.66. Prices are trading close to the key technical resistance level at 63.71 (R1). After having been unable to move above 63.51 in the prior session, the stock ran into sellers again around the same price level today, failing to move higher than 63.32.
Though the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could speed up should prices move above the nearby swing high at 64.68 where further buy stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 50" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Applied Industrial. Out of 37 times, AIT closed lower 67.57% 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 64.86% with an average market move of -1.78%.