FLS closes below its opening price unable to hold early session gains
Flowserve Corporation (FLS) Technical Analysis Report for Jul 16, 2019 | by Techniquant Editorial Team
FLS finished Tuesday at 52.95 edging lower $0.11 (-0.21%), but still slightly outperforming the S&P 500 (-0.34%). Trading $0.40 higher after the open, the stock was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on July 9th, FLS lost -1.44% on the following trading day. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (FLS as at Jul 16, 2019):
Tuesday's trading range has been $0.79 (1.49%), that's slightly below the last trading month's daily average range of $0.88. 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 slightly lower than usual for FLS.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bearish Spinning Top and the Bearish High-Wave Candle which are both known as bearish patterns.
Prices are trading close to the key technical support level at 52.53 (S1). After having been unable to move lower than 52.66 in the prior session, Flowserve found buyers again around the same price level today at 52.60.
Though the share 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 53.82 where further buy stops might get triggered. With prices trading close to this year's high at 54.16, upside momentum could speed up should the market be able to break out to new highs for the year. As prices are trading close to July's high at 53.98, upside momentum might accelerate should FLS 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 High-Wave Candle" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Flowserve. Out of 23 times, FLS closed higher 52.17% 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 69.57% with an average market move of 1.53%.