AON loses $2.21 (-1.07%) after posting strong earnings
Aon plc Class A (AON) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
AON finished the month 6.55% higher at 205.22 after losing $2.21 (-1.07%) today on high volume, notably underperforming the S&P 500 (0.77%) following today's earnings report. Trading up to $4.67 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (AON as at Jul 31, 2020):
AON reported earnings of $1.96 per share before today's market open. With analysts having expected an EPS of $1.94, Aon plc Class A surpassed market expectations by 1.0%. The company's last earnings report was released on May 1, 2020, when Aon plc Class A reported earnings of $3.68 per share missing market expectations by -0.8%.
Friday's trading range has been $6.28 (3.06%), that's far above the last trading month's daily average range of $3.06. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AON.
While trading as low as 200.53 during the day, Aon plc has decisively rejected those price levels and formed a bullish Pin Bar closing $4.69 above today's low. Additionally, three candlestick patterns are matching today's price action, the Southern Doji which is known as bullish pattern and two neutral patterns, the Doji and the Long-Legged Doji. The last time a Southern Doji showed up on April 22nd, AON actually lost -3.76% on the following trading day.
After trading as low as 200.53 during the day, the market found support at the 20-day moving average at 201.99.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 207.43 where further buy stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Stock Earning Report based market condition "Trading Day post strong Earnings Report" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Aon plc. Out of 21 times, AON closed higher 57.14% 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 71.43% with an average market move of 1.79%.