AYI runs into sellers around 85.10 for the forth day in a row
Acuity Brands Inc (AYI) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, AYI finished the week 9.62% higher at 84.78 after edging higher $0.47 (0.56%) today on low volume, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (AYI as at May 22, 2020):
Friday's trading range has been $2.25 (2.65%), that's far below the last trading month's daily average range of $3.65. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for AYI. Prices continued to consolidate within a tight trading range between 80.39 and 85.70 where it has been caught now for the whole last trading week.
Three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji.
Prices are trading close to the key technical resistance level at 85.70 (R1). Acuity Brands was sold again around 85.10 after having seen highs at 84.90, 84.88 and 84.75 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on March 31st, AYI lost -5.77% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Buying could accelerate should prices move above the nearby swing high at 85.70 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 80.39 where further sell stops might get triggered. As prices are trading close to May's high at 87.40, upside momentum could accelerate should the share mark new highs for the month.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Acuity Brands. Out of 59 times, AYI closed higher 67.80% 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 45.76% with an average market move of 0.24%.