BWA finds buyers around 29.15 for the third day in a row
BorgWarner Inc. (BWA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
BWA ended the week 7.45% higher at 29.84 after edging lower $0.06 (-0.2%) today, slightly underperforming 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.
Daily Candlestick Chart (BWA as at May 22, 2020):
Friday's trading range has been $1.07 (3.55%), that's slightly below the last trading month's daily average range of $1.26. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for BWA. Prices continued to consolidate within a tight trading range between 28.80 and 30.22 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. The last time this happened on May 12th, BWA lost -6.66% on the following trading day.
After trading down to 29.15 earlier during the day, the share bounced off the key technical support level at 29.61 (S1). The failure to close below the support might increase that levels significance as support going forward. BorgWarner found buyers again today around 29.15 for the third trading day in a row after having found demand at 29.29 in the prior session and at 29.32 two days ago.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the six 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 394 times, BWA closed higher 61.17% 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 53.30% with an average market move of 0.87%.