CSX closes above its opening price after recovering from early selling pressure
CSX Corporation (CSX) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
CSX finished the month 2.29% higher at 71.34 after gaining $1.10 (1.57%) today on high volume, slightly underperforming the Nasdaq 100 (1.78%). Trading up to $1.84 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 71.30, the market confirmed its breakout through the previous session high after trading up to $0.09 above it intraday.
Daily Candlestick Chart (CSX as at Jul 31, 2020):
Friday's trading range has been $3.32 (4.75%), that's far above the last trading month's daily average range of $1.55. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for CSX.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Even with a weak opening the stock managed to close above the prior day's open and close, forming a bullish Engulfing Candle. The last time this candlestick pattern showed up on March 19th, CSX actually lost -9.34% on the following trading day.
CSX managed to close back above the 50-day moving average at 70.48. Prices are trading close to the key technical resistance level at 72.45 (R1). After having been unable to move above 71.30 in the previous session, the share ran into sellers again around the same price level today, missing to move higher than 71.39.
Though the market is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Buying might accelerate should prices move above the nearby swing high at 72.13 where further buy stops could get activated.
Among the 12 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for CSX. Out of 544 times, CSX closed higher 54.60% 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 60.85% with an average market move of 0.99%.