APA finds buyers around 11.65 for the third day in a row
Apache Corporation (APA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, APA ended the week 14.7% higher at 12.17 after gaining $0.12 (1.0%) today on low volume, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.35 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (APA as at May 22, 2020):
Friday's trading range has been $0.55 (4.58%), that's below the last trading month's daily average range of $1.03. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for APA. Prices continued to consolidate within a tight trading range between 11.32 and 12.35 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on April 6th, APA actually gained 11.07% on the following trading day.
After trading as low as 11.65 during the day, the market found support at the 20-day moving average at 11.67. Apache found buyers again today around 11.65 for the third trading day in a row after having found demand at 11.77 in the previous session and at 11.64 two days ago.
The stock 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 close-by swing high at 12.35 where further buy stops might get triggered. Selling could accelerate should prices move below the nearby swing low at 11.32 where further sell stops might get activated. As prices are trading close to May's high at 13.18, upside momentum could speed up should APA mark new highs for the month.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Apache. Out of 56 times, APA closed higher 58.93% 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 four trading days, showing a win rate of 60.71% with an average market move of 0.87%.