AOS finds buyers again around 50.95
A.O. Smith Corporation (AOS) Technical Analysis Report for Mar 15, 2019 | by Techniquant Editorial Team
AOS finished the week 0.88% higher at 51.32 after gaining $0.35 (0.69%) today on high volume, slightly outperforming the S&P 500 (0.5%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (AOS as at Mar 15, 2019):
Friday's trading range has been $0.77 (1.51%), that's slightly above the last trading month's daily average range of $0.76. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for AOS.
In spite of a weak opening the stock managed to close above the previous day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on January 2nd, AOS actually lost -2.42% on the following trading day.
Prices are trading close to the key technical resistance level at 51.78 (R1). After having been unable to move lower than 50.90 in the prior session, the market found buyers again around the same price level today at 50.95.
Although the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might speed up should prices move above the nearby swing high at 51.78 where further buy stops could get activated. Selling might accelerate should prices move below the close-by swing low at 50.90 where further sell stops could get triggered.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Engulfing Candle" stand out. Its common bullish interpretation has been confirmed for A. O. Smith. Out of 51 times, AOS closed higher 54.90% 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 64.71% with an average market move of 2.21%.