GD finds buyers around 136.60 for the forth day in a row
General Dynamics Corporation (GD) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GD finished the week 5.84% higher at 138.57 after edging lower $0.10 (-0.07%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GD as at May 22, 2020):
Friday's trading range has been $2.70 (1.94%), that's far below the last trading month's daily average range of $4.10. 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 134.99 and 140.53 where it has been caught now for the whole last trading week.
The stock was bought again around 136.60 after having seen lows at 136.40, 136.55 and 136.06 in the last three trading sessions. Obviously there is something going on at that level. The last time this happened on February 11th, GD gained 0.97% on the following trading day.
Although still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying might accelerate should prices move above the close-by swing high at 140.53 where further buy stops could get activated. Selling might speed up should prices move below the nearby swing low at 136.40 where further sell stops could get triggered. Further buying might move prices higher should the market test April's close-by high at 142.46.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to prior three Lows" stand out. While it is usually interpreted as bullish, it has actually shown to be bearish for General Dynamics. Out of 20 times, GD closed lower 55.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 65.00% with an average market move of -2.14%.