AOS dominated by bulls lifting the market higher throughout the day
A.O. Smith Corporation (AOS) Technical Analysis Report for May 18, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, AOS finished Monday at 43.50 surging $3.09 (7.65%), significantly outperforming the S&P 500 (3.15%). This is the biggest single-day gain in over a year. The last time we've seen such an unusually strong single-day gain on April 27th, AOS gained 1.95% on the following trading day. The bulls were in full control today, moving the market higher throughout the whole session. Ending with a strong close near the high of the day sets a bullish note for the next session.
Daily Candlestick Chart (AOS as at May 18, 2020):
Monday's trading range has been $2.06 (4.93%), that's far above the last trading month's daily average range of $1.41. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AOS.
One bullish candlestick pattern matches today's price action, the White Candle.
The market managed to close back above the 100-day moving average at 42.25 for the first time since May 11th. Prices are trading close to the key technical resistance level at 44.34 (R1).
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the close-by swing high at 44.99 where further buy stops might get activated. As prices are trading close to May's high at 44.99, upside momentum could speed up should A. O. Smith mark new highs for the month.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for A. O. Smith. Out of 150 times, AOS closed higher 52.00% 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 67.33% with an average market move of 1.23%.