AXTA breaks back above 50-day moving average
Axalta Coating Systems Ltd. (AXTA) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, AXTA ended the week 2.01% higher at 29.89 after gaining $0.14 (0.47%) today, slightly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Today's close at 29.89 marks the highest recorded closing price since January 17th. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (AXTA as at Feb 14, 2020):
Friday's trading range has been $0.25 (0.84%), that's far below the last trading month's daily average range of $0.59. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for AXTA. Prices continued to consolidate within a tight trading range between 29.30 and 29.95 where it has been caught now for the last three trading days.
Three candlestick patterns are matching today's price action, the Bullish Short Candle, the Tweezer Top and the White Candle which are known as bullish patterns.
The stock managed to close back above the 50-day moving average at 29.88 for the first time since February 5th. Prices are trading close to the key technical resistance level at 30.04 (R1). After having been unable to move above 29.95 in the previous session, Axalta Coating ran into sellers again around the same price level today, failing to move higher than 29.95. The last time this happened on Tuesday, AXTA actually gained 0.82% on the following trading day.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 30.17 where further buy stops could get triggered. As prices are trading close to February's high at 30.17, upside momentum might speed up should the market mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Short Candle" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for Axalta Coating. Out of 31 times, AXTA closed lower 64.52% 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 74.19% with an average market move of -3.10%.