GD still stuck within tight trading range
General Dynamics Corporation (GD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
GD ended Wednesday at 146.78 gaining $1.64 (1.13%), strongly outperforming the S&P 500 (-0.46%). Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (GD as at Sep 16, 2020):
Wednesday's trading range has been $4.25 (2.93%), that's above the last trading month's daily average range of $3.42. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GD. Prices continued to consolidate within a tight trading range between 142.41 and 148.55 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar.
After trading down to 144.30 earlier during the day, the market bounced off the key technical support level at 144.43 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on September 4th, GD actually lost -3.12% on the following trading day. The stock ran into sellers again today around 148.55 for the third trading day in a row after having found sellers at 148.11 in the previous session and at 148.52 two days ago.
Although General Dynamics is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Support S1" stand out. Its common bullish interpretation has been confirmed for General Dynamics. Out of 409 times, GD closed higher 58.92% 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 60.88% with an average market move of 0.77%.