EL runs into sellers around 219.80 for the third day in a row
Estee Lauder Companies Inc. (EL) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
EL finished Wednesday at 217.26 losing $0.50 (-0.23%) on low volume, but still slightly outperforming the S&P 500 (-0.46%). Trading $1.52 higher after the open, the share was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Tuesday's low at 217.59, Estee Lauder confirmed its breakout through the prior session low after trading up to $0.39 below it intraday.
Daily Candlestick Chart (EL as at Sep 16, 2020):
Wednesday's trading range has been $2.60 (1.19%), that's far below the last trading month's daily average range of $4.53. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for EL.
Prices are trading close to the key technical support level at 215.69 (S1). The market ran into sellers again today around 219.80 for the third trading day in a row after having found sellers at 220.28 in the previous session and at 219.74 two days ago. The last time this happened on September 3rd, EL lost -0.84% on the following trading day.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Buying could accelerate should prices move above the close-by swing high at 220.28 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 213.28 where further sell stops might get triggered. With prices trading close to this year's high at 224.23, upside momentum could accelerate should EL be able to break out to new highs for the year. As prices are trading close to September's high at 223.28, upside momentum might speed up should the share mark new highs for the month. As prices are trading close to September's low at 212.15, downside momentum could accelerate should Estee Lauder mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior two Highs" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Estee Lauder. Out of 129 times, EL closed higher 59.69% 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 65.89% with an average market move of 1.76%.