ATO closes below its opening price unable to hold early session gains
Atmos Energy Corporation (ATO) Technical Analysis Report for Nov 08, 2019 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, ATO ended the week -3.92% lower at 107.32 after losing $0.86 (-0.79%) today, strongly underperforming the S&P 500 (0.26%). Today's close at 107.32 marks the lowest recorded closing price since August 5th. Trading $0.76 higher after the open, Atmos Energy 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 missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ATO as at Nov 08, 2019):
Friday's trading range has been $1.74 (1.61%), that's slightly above the last trading month's daily average range of $1.51. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for ATO.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices broke below the key technical support level at 107.57 (now R1), which is likely to act as resistance going forward.
Crossing below the lower Bollinger Band for the first time since Tuesday, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 110.98 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on Monday, ATO lost -1.43% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Atmos Energy. Out of 278 times, ATO closed higher 54.68% 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 60.43% with an average market move of 0.83%.