AWK dominated by bulls lifting the market higher throughout the day
American Water Works Company Inc. (AWK) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, AWK finished Thursday at 119.32 gaining $8.87 (8.03%), strongly outperforming the S&P 500 (6.24%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Wednesday's high at 114.27, the share confirmed its breakout through the prior session high after trading up to $7.60 above it intraday.
Daily Candlestick Chart (AWK as at Mar 26, 2020):
Thursday's trading range has been $13.34 (12.29%), that's above the last trading month's daily average range of $10.40. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for AWK.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 115.35 (now S1), which is likely to act as support going forward. Unable to break through the key technical resistance level at 121.75 (R1), the stock closed below it after spiking up to 121.87 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on March 16th, AWK actually gained 16.57% on the following trading day.
Though the market is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the nine 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. Its common bullish interpretation has been confirmed for American Water. Out of 311 times, AWK closed higher 50.48% 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 62.38% with an average market move of 0.79%.