AN breaks below Tuesday's low
AutoNation Inc. (AN) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
AN ended Wednesday at 54.98 tanking $1.32 (-2.34%), notably underperforming the S&P 500 (-0.46%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 55.64, AutoNation confirmed its breakout through the previous session low after trading up to $0.81 below it intraday.
Daily Candlestick Chart (AN as at Sep 16, 2020):
Wednesday's trading range has been $2.06 (3.63%), that's above the last trading month's daily average range of $1.63. 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 AN.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on April 22nd, AN actually gained 5.56% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices are trading close to the key technical support level at 53.72 (S1). After having been unable to move above 56.85 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 56.89.
Although the share is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
As prices are trading close to September's low at 54.72, downside momentum could speed up should the stock mark new lows for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Strong Down Move" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for AutoNation. Out of 193 times, AN closed higher 53.37% 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 52.33% with an average market move of 0.76%.