BWA runs into sellers again around 25.05
BorgWarner Inc. (BWA) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, BWA ended Thursday at 24.94 gaining $1.22 (5.14%), significantly underperforming the S&P 500 (6.24%). Trading up to $0.79 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Wednesday's high at 24.68, the market confirmed its breakout through the prior session high after trading up to $0.37 above it intraday.
Daily Candlestick Chart (BWA as at Mar 26, 2020):
Thursday's trading range has been $1.92 (8.03%), that's slightly below the last trading month's daily average range of $2.36. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for BWA.
One bullish candlestick pattern matches today's price action, the White Candle.
After trading down to 23.13 earlier during the day, BorgWarner bounced off the key technical support level at 23.25 (S1). The failure to close below the support could increase that levels importance as support going forward. After having been unable to move above 24.68 in the previous session, the stock ran into sellers again around the same price level today, failing to move higher than 25.05. The last time this happened on March 20th, BWA actually gained 3.17% on the following trading day.
Although BWA is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the eight 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 397 times, BWA closed higher 61.96% 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 52.39% with an average market move of 0.78%.