GPC closes above its opening price after recovering from early selling pressure
Genuine Parts Company (GPC) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GPC ended the week 5.61% higher at 77.22 after edging higher $0.07 (0.09%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.85 lower after the open, Genuine Parts managed to reverse during the session as bulls took control ending the day above its opening price. 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 (GPC as at May 22, 2020):
Friday's trading range has been $1.21 (1.57%), that's far below the last trading month's daily average range of $2.70. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GPC. Prices continued to consolidate within a tight trading range between 75.41 and 78.73 where it has been caught now for the whole last trading week.
During the whole day, prices traded within the prior day's range, unable to trade above the previous day's high or below the prior day's low forming an Inside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man.
After having been unable to move above 77.62 in the previous session, the share ran into sellers again around the same price level today, failing to move higher than 77.45. The last time this happened on Wednesday, GPC lost -0.09% on the following trading day.
Though the stock is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could speed up should prices move above the close-by swing high at 78.73 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 75.41 where further sell stops might get triggered.
Among the eight 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 Genuine Parts. Out of 666 times, GPC closed higher 53.15% 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 56.76% with an average market move of 0.42%.