CMI closes above its opening price after recovering from early selling pressure
Cummins Inc. (CMI) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
CMI finished the week 3.72% higher at 166.78 after gaining $0.68 (0.41%) today, slightly outperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Trading up to $1.29 lower after the open, the stock managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on January 23rd, CMI actually lost -1.46% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (CMI as at Feb 14, 2020):
Friday's trading range has been $2.02 (1.22%), that's far below the last trading month's daily average range of $3.58. 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 slightly higher than usual for CMI.
Cummins managed to close back above the 20-day moving average at 166.15. Prices are trading close to the key technical resistance level at 167.39 (R1).
The share shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying could speed up should prices move above the close-by swing high at 170.11 where further buy stops might get activated.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Break through SMA 20" stand out. Its common bullish interpretation has been confirmed for Cummins. Out of 139 times, CMI closed higher 51.08% 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 58.99% with an average market move of 0.82%.