CMI closes higher for the 2nd day in a row
Cummins Inc. (CMI) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, CMI ended the month 2.16% higher at 173.26 after edging higher $0.19 (0.11%) today, significantly underperforming the S&P 500 (1.54%). Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (CMI as at Jun 30, 2020):
Tuesday's trading range has been $3.77 (2.19%), that's slightly below the last trading month's daily average range of $4.78. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for CMI.
Prices are trading close to the key technical support level at 172.66 (S1). After having been unable to move lower than 170.19 in the prior session, the market found buyers again around the same price level today at 170.77.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term. With its 50-day moving average crossing above its 200-day moving average, the share has entered a so-called "Golden Cross" for the first time since March 6th. Showing increasing upward momentum in the short and medium-term the "Golden Cross" is known to indicate a potential bull market on the horizon. When the last "Golden Cross" happened on October 29, 2019, CMI actually lost -1.43% on the following trading day.
Buying might speed up should prices move above the nearby swing high at 174.64 where further buy stops could get triggered.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Golden Cross" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Cummins. Out of 5 times, CMI closed lower 80.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after eight trading days, showing a win rate of 60.00% with an average market move of -0.02%.