EMR closes higher for the 2nd day in a row
Emerson Electric Company (EMR) Technical Analysis Report for Jul 13, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, EMR finished Monday at 60.83 gaining $1.06 (1.77%), significantly outperforming the S&P 500 (-0.94%). Closing above Friday's high at 59.93, the market confirmed its breakout through the prior session high after trading up to $2.01 above it intraday.
Daily Candlestick Chart (EMR as at Jul 13, 2020):
Monday's trading range has been $2.26 (3.79%), that's above the last trading month's daily average range of $1.65. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for EMR.
In spite of a weak opening Emerson Electric managed to close above the previous day's open and close, forming a bullish Engulfing Candle. Additionally, one bullish candlestick pattern matches today's price action, the White Candle.
After spiking up to 61.94 during the day, the stock found resistance at the 20-day moving average at 61.28. The last time this happened on July 2nd, EMR actually gained 1.39% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling might speed up should prices move below the nearby swing low at 59.07 where further sell stops could get activated. As prices are trading close to July's high at 63.44, upside momentum might accelerate should the share mark new highs for the month. Further selling could move prices lower should the market test June's close-by low at 58.67.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Bounce off SMA 20" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Emerson Electric. Out of 57 times, EMR closed higher 59.65% 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 52.63% with an average market move of 0.61%.