DCI misses to close above 20-day moving average
Donaldson Company Inc. (DCI) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, DCI ended the month -1.96% lower at 46.52 after gaining $0.65 (1.42%) today, slightly underperforming the S&P 500 (1.54%). The bulls were in full control today, moving the market higher throughout the whole session. Closing above Monday's high at 46.11, Donaldson confirmed its breakout through the prior session high after trading up to $0.75 above it intraday.
Daily Candlestick Chart (DCI as at Jun 30, 2020):
Tuesday's trading range has been $1.07 (2.34%), that's below the last trading month's daily average range of $1.43. 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 lower than usual for DCI.
Two candlestick patterns are matching today's price action, the White Candle which is known as bullish pattern and one bearish pattern, the Last Engulfing Top Pattern.
After spiking up to 46.86 during the day, the stock found resistance at the 20-day moving average at 46.81. The last time this happened on April 6th, DCI actually gained 4.33% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "4 Consecutive Higher Closes" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for Donaldson. Out of 91 times, DCI closed lower 59.34% 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 50.55% with an average market move of -0.31%.