EME finds buyers at key support level
EMCOR Group Inc. (EME) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
EME finished Wednesday at 70.00 gaining $0.37 (0.53%), outperforming the S&P 500 (-0.46%). 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 (EME as at Sep 16, 2020):
Wednesday's trading range has been $1.06 (1.52%), that's below the last trading month's daily average range of $1.64. 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 EME.
After moving lower in the prior session, the market managed to close higher but below the previous day's open, forming a bullish Harami Candle. Additionally, one bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
After trading down to 69.71 earlier during the day, the share bounced off the key technical support level at 69.79 (S1). The failure to close below the support might increase that levels significance as support going forward. After having been unable to move lower than 69.55 in the prior session, the stock found buyers again around the same price level today at 69.71. The last time this happened on September 9th, EME actually lost -2.12% on the following trading day.
Though EMCOR Group is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might accelerate should prices move below the nearby swing low at 68.17 where further sell stops could get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Harami Candle" stand out. Its common bullish interpretation has been confirmed for EMCOR Group. Out of 44 times, EME closed higher 54.55% 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 70.45% with an average market move of 2.33%.