AOS closes within previous day's range after lackluster session
A.O. Smith Corporation (AOS) Technical Analysis Report for May 21, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, AOS ended Thursday at 42.68 edging higher $0.22 (0.52%) on low volume, significantly outperforming the S&P 500 (-0.78%). Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (AOS as at May 21, 2020):
Thursday's trading range has been $0.69 (1.63%), that's far below the last trading month's daily average range of $1.36. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AOS. Prices continued to consolidate within a tight trading range between 41.96 and 43.38 where it has been caught now for the last three trading days.
Four candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and two bearish patterns, the Bearish Hikkake Pattern and the Last Engulfing Top Pattern. The last time a Bearish Hikkake Pattern showed up on April 6th, AOS actually gained 3.77% on the following trading day.
Prices are trading close to the key technical support level at 42.29 (S1). After having been unable to move lower than 42.10 in the previous session, the share found buyers again around the same price level today at 42.25.
A. O. Smith shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the nearby swing high at 43.79 where further buy stops might get activated. As prices are trading close to May's high at 44.99, upside momentum could accelerate should the stock mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for A. O. Smith. Out of 74 times, AOS closed higher 62.16% 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 62.16% with an average market move of 0.57%.