EMR still stuck within tight trading range
Emerson Electric Company (EMR) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 4th day in a row, EMR finished Wednesday at 68.68 gaining $0.27 (0.39%) on high volume, outperforming the S&P 500 (-0.46%). Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (EMR as at Sep 16, 2020):
Wednesday's trading range has been $1.80 (2.61%), that's above the last trading month's daily average range of $1.44. 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. Prices continued to consolidate within a tight trading range between 67.20 and 69.54 where it has been caught now for the whole last trading week.
One bearish candlestick pattern matches today's price action, the Bearish Spinning Top.
Prices are trading close to the key technical resistance level at 69.40 (R1). After having been unable to move above 69.54 in the prior session, the market ran into sellers again around the same price level today, missing to move higher than 69.32. The last time this happened on September 3rd, EMR actually gained 1.16% on the following trading day.
Although 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 nearby swing high at 69.54 where further buy stops might get activated. Selling could speed up should prices move below the close-by swing low at 67.20 where further sell stops might get triggered. As prices are trading close to September's high at 71.08, upside momentum could accelerate should the share mark new highs for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Spinning Top" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Emerson Electric. Out of 223 times, EMR closed higher 52.91% 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 55.16% with an average market move of 0.05%.