EL finds buyers at key support level
Estee Lauder Companies Inc. (EL) Technical Analysis Report for Jun 01, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, EL ended Monday at 200.43 gaining $2.96 (1.5%), strongly outperforming the S&P 500 (0.38%). Today's close at 200.43 marks the highest recorded closing price since February 21st.
Daily Candlestick Chart (EL as at Jun 01, 2020):
Monday's trading range has been $3.29 (1.65%), that's below the last trading month's daily average range of $4.98. Things look different on the weekly timeframe, where the market's trading range of the last week has been above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for EL.
After trading down to 198.43 earlier during the day, the share bounced off the key technical support level at 199.05 (S1). The failure to close below the support might increase that levels importance as support going forward. When prices bounced off a significant support level the last time on May 14th, EL gained 3.18% on the following trading day.
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 177.64.
Though still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the four 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 Estee Lauder. Out of 430 times, EL closed higher 55.58% 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 57.67% with an average market move of 0.85%.