CMI closes above its opening price after recovering from early selling pressure
Cummins Inc. (CMI) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CMI ended Thursday at 134.96 gaining $7.19 (5.63%) on low volume, underperforming the S&P 500 (6.24%). Trading up to $5.92 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Wednesday's high at 132.13, the share confirmed its breakout through the prior session high after trading up to $3.74 above it intraday.
Daily Candlestick Chart (CMI as at Mar 26, 2020):
Thursday's trading range has been $10.28 (7.82%), that's above the last trading month's daily average range of $8.55. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for CMI.
Prices are trading close to the key technical resistance level at 137.92 (R1).
Though Cummins is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might accelerate should prices move above the nearby swing high at 137.81 where further buy stops could get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Closed above last periods high" stand out. Its common bullish interpretation has been confirmed for Cummins. Out of 369 times, CMI closed higher 53.12% 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 56.64% with an average market move of 0.66%.