CMC closes lower for the 3rd day in a row
Commercial Metals Company (CMC) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, CMC ended the week -1.14% lower at 20.80 after losing $0.33 (-1.56%) today on low volume, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 20.96, Commercial Metals confirmed its breakout through the previous session low after trading up to $0.24 below it intraday.
Daily Candlestick Chart (CMC as at Feb 14, 2020):
Friday's trading range has been $0.44 (2.08%), that's below the last trading month's daily average range of $0.57. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly lower than usual for CMC.
Three candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and two bearish patterns, the Bearish Short Candle and the Black Candle.
Prices broke below the key technical support level at 20.87 (now R1), which is likely to act as resistance going forward. The last time this happened on February 7th, CMC actually gained 1.71% on the following trading day.
The market shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
With prices trading close to this year's low at 20.35, downside momentum could speed up should the share break out to new lows for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Last Engulfing Bottom Pattern" stand out. Its common bullish interpretation has been confirmed for Commercial Metals. Out of 67 times, CMC closed higher 58.21% 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 65.67% with an average market move of 2.42%.