FLS slides to lowest close since December 17, 2019
Flowserve Corporation (FLS) Technical Analysis Report for Jan 24, 2020 | by Techniquant Editorial Team
FLS ended the week -4.42% lower at 48.26 after tanking $0.83 (-1.69%) today, underperforming the S&P 500 (-0.9%). Today's close at 48.26 marks the lowest recorded closing price since December 17, 2019. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (FLS as at Jan 24, 2020):
Friday's trading range has been $1.53 (3.11%), that's far above the last trading month's daily average range of $0.84. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for FLS.
Two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on December 2, 2019, FLS actually lost -3.26% on the following trading day.
Prices are trading close to the key technical support level at 47.67 (S1). The market closed back below the 50-day moving average at 49.01. After having been unable to move above 49.11 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 49.27.
Crossing below the lower Bollinger Band for the first time since Wednesday, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 49.75 or signal the beginning of a strong momentum breakout leading to even lower prices.
Though still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Selling could speed up should prices move below the nearby swing low at 47.56 where further sell stops might get triggered.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior High" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Flowserve. Out of 544 times, FLS closed higher 54.23% 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 54.04% with an average market move of 0.42%.