ARNC pushes through key technical resistance level
Arconic Inc. (ARNC) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, ARNC finished Wednesday at 21.29 gaining $0.78 (3.8%) on high volume, significantly outperforming the S&P 500 (-0.46%). Closing above Tuesday's high at 20.74, the share confirmed its breakout through the prior session high after trading up to $1.06 above it intraday.
Daily Candlestick Chart (ARNC as at Sep 16, 2020):
Wednesday's trading range has been $1.59 (7.74%), that's far above the last trading month's daily average range of $1.06. 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 ARNC.
Buyers managed to take out the key technical resistance level at 20.58 (now S1), which is likely to act as support going forward. The last time this happened on August 4th, ARNC gained 12.49% on the following trading day. After having been unable to move lower than 20.04 in the previous session, Arconic found buyers again around the same price level today at 20.21.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the nearby swing high at 22.35 where further buy stops might get activated. As prices are trading close to September's high at 22.98, upside momentum could speed up should the market mark new highs for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Resistance R1" stand out. Though it is usually interpreted as bullish, it has actually shown to be bearish for Arconic. Out of 221 times, ARNC closed lower 54.30% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.30% with an average market move of -0.93%.