AU closes lower for the 4th day in a row
AngloGold Ashanti Limited (AU) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 4th day in a row, AU ended the month 9.16% higher at 32.19 after losing $0.22 (-0.68%) today, strongly underperforming the S&P 500 (0.77%). The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 32.23, the market confirmed its breakout through the previous session low after trading up to $0.17 below it intraday.
Daily Candlestick Chart (AU as at Jul 31, 2020):
Friday's trading range has been $1.00 (3.03%), that's below the last trading month's daily average range of $1.40. 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 slightly higher than usual for AU.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 32.06 earlier during the day, AngloGold Ashanti bounced off the key technical support level at 32.12 (S1). The failure to close below the support might increase that levels significance as support going forward. When prices bounced off a significant support level the last time on July 23rd, AU gained 6.62% on the following trading day. After having been unable to move lower than 32.23 in the prior session, the stock found buyers again around the same price level today at 32.06.
Though the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the close-by swing low at 31.73 where further sell stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Lower Closes" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for AngloGold Ashanti. Out of 76 times, AU closed higher 52.63% 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 57.89% with an average market move of 1.84%.