CTB closes higher for the 3rd day in a row
Cooper Tire & Rubber Company (CTB) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, CTB finished the week 14.81% higher at 24.57 after edging higher $0.25 (1.03%) today on low volume, outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Today's close at 24.57 marks the highest recorded closing price since March 6th. Trading up to $0.72 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on Wednesday, CTB gained 4.83% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (CTB as at May 22, 2020):
Friday's trading range has been $0.81 (3.3%), that's far below the last trading month's daily average range of $1.29. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CTB.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, one bearish candlestick pattern matches today's price action, the Hanging Man.
Prices are trading close to the key technical resistance level at 24.93 (R1).
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day although could signal a potential change in momentum that might lead to a correction back down towards the center of the Bollinger Bands at 21.78.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could speed up should prices move above the nearby swing high at 24.81 where further buy stops might get triggered. Trading close to March's high at 25.89 we could see further upside momentum if potential buy stops at the level get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Its common bearish interpretation has been confirmed for Cooper Tire. Out of 59 times, CTB closed lower 55.93% 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 10 trading days, showing a win rate of 49.15% with an average market move of -0.62%.