AN closes below its opening price unable to hold early session gains
AutoNation Inc. (AN) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
AN ended the month -4.81% lower at 37.58 after edging lower $0.09 (-0.24%) today on low volume, strongly underperforming the S&P 500 (1.54%). Trading $0.67 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on June 26th, AN actually gained 5.28% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (AN as at Jun 30, 2020):
Tuesday's trading range has been $1.06 (2.82%), that's far below the last trading month's daily average range of $1.78. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AN.
One neutral candlestick pattern matches today's price action, the Doji.
Unable to break through the key technical resistance level at 38.01 (R1), the market closed below it after spiking up to 38.27 earlier during the day. The failure to close above the resistance might increase that levels significance going forward.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could accelerate should prices move above the nearby swing high at 38.84 where further buy stops might get triggered. Selling could speed up should prices move below the close-by swing low at 35.64 where further sell stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for AutoNation. Out of 421 times, AN closed higher 50.59% 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 54.16% with an average market move of 1.04%.