AOS unable to break through key resistance level
A.O. Smith Corporation (AOS) Technical Analysis Report for May 15, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, AOS finished the week -9.78% lower at 40.41 after edging higher $0.13 (0.32%) today on high volume, slightly underperforming the S&P 500 (0.39%). Closing above Thursday's high at 40.35, A. O. Smith confirmed its breakout through the previous session high after trading up to $1.23 above it intraday.
Daily Candlestick Chart (AOS as at May 15, 2020):
Friday's trading range has been $1.58 (3.95%), that's slightly above the last trading month's daily average range of $1.37. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AOS.
Prices are trading close to the key technical support level at 39.46 (S1). Unable to break through the key technical resistance level at 41.14 (R1), the share closed below it after spiking up to 41.58 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. When prices bounced off a significant resistance level the last time on May 6th, AOS lost -0.78% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for A. O. Smith. Out of 332 times, AOS closed higher 55.12% 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 63.25% with an average market move of 0.89%.