AXL ends the day on a bearish note closing near the low of the day
American Axle & Manufacturing Holdings Inc. (AXL) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, AXL finished Wednesday at 6.73 tanking $1.01 (-13.05%) on high volume, notably underperforming the S&P 500 (-0.46%). This is the biggest single-day loss in over three months. Today's close at 6.73 marks the lowest recorded closing price since August 4th. The bears were in full control today, moving the market lower throughout the whole session. Ending with a weak close near the low of the day sets a bearish note for the next session.
Daily Candlestick Chart (AXL as at Sep 16, 2020):
Wednesday's trading range has been $1.08 (14.06%), that's far above the last trading month's daily average range of $0.39. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AXL.
Two candlestick patterns are matching today's price action, the Bearish Belt-hold and the Black Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 6.57 (S1). American Axle closed below the 200-day moving average at 7.23 for the first time since August 24th.
Crossing below the lower Bollinger Band for the first time since July 9th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 7.62 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on July 9th, AXL actually gained 5.72% on the following trading day.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Trading close to July's low at 6.39 we could see further downside momentum if potential sell stops at the level get triggered.
Among the 17 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the lower Bollinger Band" stand out. Its common bearish interpretation has been confirmed for American Axle. Out of 76 times, AXL closed lower 57.89% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 60.53% with an average market move of -1.50%.