AOS pops to highest close since July 29th
A.O. Smith Corporation (AOS) Technical Analysis Report for Sep 18, 2020 | by Techniquant Editorial Team
Moving higher for the 8th day in a row, AOS finished the week 9.14% higher at 53.24 after edging higher $0.06 (0.11%) today on high volume, notably outperforming the S&P 500 (-1.12%). Today's close at 53.24 marks the highest recorded closing price since July 29th. Trading $0.78 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. 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 Sep 18, 2020):
Friday's trading range has been $0.96 (1.8%), that's slightly below the last trading month's daily average range of $1.04. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for AOS.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, four candlestick patterns are matching today's price action, the Gravestone Doji, the Northern Doji and the Shooting Star which are known as bearish patterns and one neutral pattern, the Doji. The last time a Gravestone Doji showed up on June 26th, AOS actually gained 4.48% on the following trading day.
Prices are trading close to the key technical resistance level at 54.19 (R1). After having been unable to move above 54.19 in the prior session, A. O. Smith ran into sellers again around the same price level today, missing to move higher than 54.03.
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 although could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 49.68.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 54.19 where further buy stops might get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "8 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for A. O. Smith. Out of 2 times, AOS closed higher 100.00% 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 100.00% with an average market move of 2.31%.