DHI runs into sellers again around 66.28
D.R. Horton Inc. (DHI) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
DHI finished the month 19.31% higher at 66.16 after edging higher $0.11 (0.17%) today, underperforming the S&P 500 (0.77%). Trading up to $1.42 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 July 24th, DHI gained 4.42% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (DHI as at Jul 31, 2020):
Friday's trading range has been $1.64 (2.48%), that's below the last trading month's daily average range of $2.30. 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 higher than usual for DHI. Prices continued to consolidate within a tight trading range between 64.64 and 67.08 where it has been caught now for the last three trading days.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern and the Bullish Spinning Top which are both known as bullish patterns and one bearish pattern, the Hanging Man.
Prices are trading close to the key technical resistance level at 66.66 (R1). After having been unable to move above 66.55 in the prior session, the market ran into sellers again around the same price level today, failing to move higher than 66.28.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Selling could speed up should prices move below the nearby swing low at 64.18 where further sell stops might get activated.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to previous High" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for D. R. Horton. Out of 545 times, DHI closed higher 53.39% 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 59.27% with an average market move of 1.36%.