AVY finds buyers at key support level
Avery Dennison Corporation (AVY) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, AVY ended the month -0.66% lower at 113.34 after losing $1.79 (-1.55%) today, significantly underperforming the S&P 500 (0.77%). Closing below Thursday's low at 114.60, the stock confirmed its breakout through the previous session low after trading up to $2.50 below it intraday.
Daily Candlestick Chart (AVY as at Jul 31, 2020):
Friday's trading range has been $2.93 (2.55%), that's slightly above the last trading month's daily average range of $2.75. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AVY.
After trading down to 112.10 earlier during the day, Avery Dennison bounced off the key technical support level at 112.42 (S1). The failure to close below the support might increase that levels significance as support going forward.
The market shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Further selling could move prices lower should the market test June's nearby low at 109.07.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed below last periods low" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Avery Dennison. Out of 398 times, AVY closed higher 55.78% 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 62.06% with an average market move of 0.98%.