GD breaks back below 50-day moving average
General Dynamics Corporation (GD) Technical Analysis Report for Jul 27, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, GD ended Monday at 147.98 losing $2.17 (-1.45%) on low volume, significantly underperforming the S&P 500 (0.74%). The bears were in full control today, moving the market lower throughout the whole session.
Daily Candlestick Chart (GD as at Jul 27, 2020):
Monday's trading range has been $2.00 (1.34%), that's far below the last trading month's daily average range of $3.31. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GD.
Two candlestick patterns are matching today's price action, the Bearish Short Candle and the Black Candle which are both known as bearish patterns. The last time a Bearish Short Candle showed up on July 15th, GD actually gained 1.87% on the following trading day.
Prices are trading close to the key technical support level at 146.91 (S1). The share closed back below the 50-day moving average at 148.65 for the first time since July 20th.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Selling could accelerate should prices move below the nearby swing low at 145.35 where further sell stops might get triggered.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for General Dynamics. Out of 112 times, GD closed higher 57.14% 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 65.18% with an average market move of 1.39%.