AOS pops to highest close since July 29th
A.O. Smith Corporation (AOS) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 6th day in a row, AOS ended Wednesday at 51.75 gaining $0.96 (1.89%), strongly outperforming the S&P 500 (-0.46%). Today's close at 51.75 marks the highest recorded closing price since July 29th.
Daily Candlestick Chart (AOS as at Sep 16, 2020):
Wednesday's trading range has been $1.28 (2.5%), that's far above the last trading month's daily average range of $0.90. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AOS.
One bullish candlestick pattern matches today's price action, the White Candle.
Unable to break through the key technical resistance level at 52.00 (R1), the stock closed below it after spiking up to 52.19 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 September 10th, AOS actually gained 0.76% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day though could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 49.29.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
With prices trading close to this year's high at 53.72, upside momentum could accelerate should the market be able to break out to new highs for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close above the upper Bollinger Band" stand out. Its common bullish interpretation has been confirmed for A. O. Smith. Out of 177 times, AOS closed higher 51.41% 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 61.58% with an average market move of 0.50%.