GD breaks below key technical support level
General Dynamics Corporation (GD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
GD finished the week 0.71% higher at 188.06 after losing $1.37 (-0.72%) today, underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GD as at Feb 14, 2020):
Friday's trading range has been $2.78 (1.47%), that's slightly below the last trading month's daily average range of $3.08. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GD. Prices continued to consolidate within a tight trading range between 185.34 and 190.08 where it has been caught now for the whole last trading week.
After moving higher in the prior session, the stock closed lower but above the previous day's open today, forming a bearish Harami Candle. The last time this candlestick pattern showed up on October 31, 2019, GD actually gained 1.66% on the following trading day.
Prices are trading close to the key technical support level at 185.96 (S1). Prices broke below the key technical support level at 188.47 (now R1), which is likely to act as resistance going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could accelerate should prices move above the close-by swing high at 190.08 where further buy stops might get activated. Selling could speed up should prices move below the nearby swing low at 185.34 where further sell stops might get triggered. 2019's high at 193.76 is within reach and we could see further upside momentum should the market manage to break out beyond.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing Low" stand out. While it is usually interpreted as neutral, it has actually shown to be bullish for General Dynamics. Out of 627 times, GD closed higher 54.86% 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 58.37% with an average market move of 0.61%.