EL stuck within tight trading range
Estee Lauder Companies Inc. (EL) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
EL finished the week 5.19% higher at 178.20 after edging higher $0.32 (0.18%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (EL as at May 22, 2020):
Friday's trading range has been $2.01 (1.13%), that's far below the last trading month's daily average range of $5.10. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for EL. Prices continued to consolidate within a tight trading range between 176.19 and 181.00 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Hanging Man.
Prices are trading close to the key technical support level at 176.00 (S1). After having been unable to move lower than 177.35 in the previous session, the market found buyers again around the same price level today at 176.89. The last time this happened on May 7th, EL gained 0.70% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 181.00 where further buy stops could get triggered.
Among the three market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Estee Lauder. Out of 69 times, EL closed higher 53.62% 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 60.87% with an average market move of 1.17%.