AXL closes above its opening price after recovering from early selling pressure
American Axle & Manufacturing Holdings Inc. (AXL) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, AXL ended Thursday at 4.44 gaining $0.24 (5.71%), underperforming the S&P 500 (6.24%). Trading up to $0.36 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (AXL as at Mar 26, 2020):
Thursday's trading range has been $0.70 (16.67%), that's slightly above the last trading month's daily average range of $0.69. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for AXL.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Last Engulfing Top Pattern.
After having been unable to move lower than 3.81 in the prior session, American Axle found buyers again around the same price level today at 3.84. The last time this happened on March 20th, AXL actually lost -7.05% on the following trading day.
Though the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the close-by swing high at 4.63 where further buy stops could get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Top Pattern" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for American Axle. Out of 50 times, AXL closed higher 54.00% 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 60.00% with an average market move of 1.68%.