BWA breaks back above 20-day moving average
BorgWarner Inc. (BWA) Technical Analysis Report for Feb 13, 2019 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, BWA finished Wednesday at 40.38 gaining $0.24 (0.6%) on high volume, slightly outperforming the S&P 500 (0.3%). Trading up to $0.38 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Tuesday's high at 40.37, BorgWarner confirmed its breakout through the prior session high after trading up to $0.14 above it intraday.
Daily Candlestick Chart (BWA as at Feb 13, 2019):
Wednesday's trading range has been $0.63 (1.56%), that's below the last trading month's daily average range of $0.91. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly lower than usual for BWA.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man.
The market managed to close back above the 20-day moving average at 40.21 for the first time since February 6th. After having been unable to move above 40.37 in the previous session, the share ran into sellers again around the same price level today, missing to move higher than 40.51. The last time this happened on Monday, BWA actually gained 3.40% on the following trading day.
BWA shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 41.33 where further buy stops could get activated. With prices trading close to this year's high at 41.43, upside momentum might speed up should the stock be able to break out to new highs for the year. As prices are trading close to February's high at 41.40, upside momentum could accelerate should BorgWarner mark new highs for the month.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for BorgWarner. Out of 421 times, BWA closed higher 57.48% 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 54.16% with an average market move of 0.91%.