EMR runs into sellers again around 49.36
Emerson Electric Company (EMR) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, EMR ended Thursday at 48.80 gaining $1.19 (2.5%), strongly underperforming the S&P 500 (6.24%). Trading up to $2.46 lower after the open, Emerson Electric managed to reverse during the session as bulls took control ending the day above its opening price. 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 (EMR as at Mar 26, 2020):
Thursday's trading range has been $3.13 (6.43%), that's below the last trading month's daily average range of $4.44. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for EMR.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, three candlestick patterns are matching today's price action, the Hanging Man and the Northern Doji which are both known as bearish patterns and one neutral pattern, the Doji.
Prices are trading close to the key technical support level at 45.12 (S1). Prices are trading close to the key technical resistance level at 49.94 (R1). After having been unable to move above 49.94 in the previous session, the stock ran into sellers again around the same price level today, failing to move higher than 49.36. The last time this happened on March 20th, EMR lost -13.63% on the following trading day.
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
Buying might speed up should prices move above the close-by swing high at 49.94 where further buy stops could get activated.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Northern Doji" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Emerson Electric. Out of 63 times, EMR closed higher 55.56% 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 52.38% with an average market move of 0.29%.