AWK closes within prior day's range
American Water Works Company Inc. (AWK) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
AWK ended the month 14.46% higher at 147.27 after gaining $0.64 (0.44%) today, slightly underperforming the S&P 500 (0.77%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (AWK as at Jul 31, 2020):
Friday's trading range has been $3.02 (2.07%), that's slightly above the last trading month's daily average range of $2.79. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AWK. Prices continued to consolidate within a tight trading range between 145.49 and 148.51 where it has been caught now for the last three trading days.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern. The last time a Last Engulfing Top Pattern showed up on Tuesday, AWK actually gained 1.81% on the following trading day.
After trading down to 145.49 earlier during the day, the share bounced off the key technical support level at 145.97 (S1). The failure to close below the support might increase that levels importance as support going forward. The market found buyers again today around 145.49 for the third trading day in a row after having found demand at 145.85 in the prior session and at 145.92 two days ago.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous two Lows" stand out. Its common bullish interpretation has been confirmed for American Water. Out of 132 times, AWK closed higher 53.79% 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 69.70% with an average market move of 0.89%.