AXL closes above its opening price after recovering from early selling pressure
American Axle & Manufacturing Holdings Inc. (AXL) Technical Analysis Report for Apr 06, 2020 | by Techniquant Editorial Team
AXL finished Monday at 3.09 gaining $0.35 (12.77%), strongly outperforming the S&P 500 (7.03%). Trading up to $0.13 lower after the open, the share 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 in a lackluster session.
Daily Candlestick Chart (AXL as at Apr 06, 2020):
Monday's trading range has been $0.22 (7.17%), that's far below the last trading month's daily average range of $0.63. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently notably 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. After moving lower in the prior session, the stock managed to close higher but below the previous day's open, forming a bullish Harami Candle. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
Prices are trading close to the key technical resistance level at 3.44 (R1). After having been unable to move above 3.22 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 3.16. The last time this happened on April 2nd, AXL lost -15.17% on the following trading day.
Although American Axle is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Selling could speed up should prices move below the nearby swing low at 2.72 where further sell stops might get triggered. With prices trading close to this year's low at 2.50, downside momentum could accelerate should AXL break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Its common bullish interpretation has been confirmed for American Axle. Out of 401 times, AXL closed higher 52.87% of the time on the next trading day after the market condition occurred.