DOV breaks back below 20-day moving average
Dover Corporation (DOV) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, DOV ended the week 5.69% higher at 89.77 after losing $1.07 (-1.18%) today, significantly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 90.54, Dover confirmed its breakout through the prior session low after trading up to $1.39 below it intraday.
Daily Candlestick Chart (DOV as at May 22, 2020):
Friday's trading range has been $1.89 (2.08%), that's slightly below the last trading month's daily average range of $2.47. 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 DOV.
Despite a strong opening the share closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on March 27th, DOV actually gained 4.50% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 89.15 earlier during the day, the market bounced off the key technical support level at 89.42 (S1). The failure to close below the support could increase that levels significance as support going forward. The stock closed back below the 20-day moving average at 90.44.
DOV shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the close-by swing high at 92.50 where further buy stops could get activated. As prices are trading close to May's high at 93.60, upside momentum might speed up should Dover mark new highs for the month.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for Dover. Out of 449 times, DOV closed higher 59.02% 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 59.69% with an average market move of 0.58%.