AN closes within previous day's range
AutoNation Inc. (AN) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
AN finished the week 9.5% higher at 47.50 after losing $0.36 (-0.75%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AN as at Feb 14, 2020):
Friday's trading range has been $0.89 (1.86%), that's slightly below the last trading month's daily average range of $1.11. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AN.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 46.83 (S1). Prices are trading close to the key technical resistance level at 48.18 (R1). After having been unable to move lower than 47.04 in the previous session, AutoNation found buyers again around the same price level today at 47.06. The last time this happened on Monday, AN gained 6.31% on the following trading day.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 44.74.
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the close-by swing high at 48.64 where further buy stops might get activated. With prices trading close to this year's high at 49.39, upside momentum could accelerate should the share be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior low" stand out. Its common bullish interpretation has been confirmed for AutoNation. Out of 544 times, AN closed higher 50.18% 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 53.68% with an average market move of 0.87%.