AVY still stuck within tight trading range
Avery Dennison Corporation (AVY) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, AVY finished the week 5.94% higher at 106.45 after gaining $0.54 (0.51%) today, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing above Thursday's high at 106.05, the market confirmed its breakout through the previous session high after trading up to $1.58 above it intraday.
Daily Candlestick Chart (AVY as at May 22, 2020):
Friday's trading range has been $1.96 (1.85%), that's far below the last trading month's daily average range of $3.59. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AVY. Prices continued to consolidate within a tight trading range between 102.56 and 107.63 where it has been caught now for the whole last trading week.
After spiking up to 107.63 during the day, the share found resistance at the 20-day moving average at 106.88. The last time this happened on April 6th, AVY actually gained 3.72% on the following trading day.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could speed up should prices move below the close-by swing low at 103.12 where further sell stops might get triggered. As prices are trading close to May's high at 109.88, upside momentum could accelerate should Avery Dennison 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 "Bearish Bounce off SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Avery Dennison. Out of 56 times, AVY closed higher 55.36% 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 64.29% with an average market move of 1.08%.