GT breaks below key technical support level
The Goodyear Tire & Rubber Company (GT) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GT finished the week -17.35% lower at 11.10 after losing $0.49 (-4.23%) today, significantly underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Today's close at 11.10 marks the lowest recorded closing price since September 3, 2019. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 11.55, The Goodyear confirmed its breakout through the previous session low after trading up to $0.51 below it intraday.
Daily Candlestick Chart (GT as at Feb 14, 2020):
Friday's trading range has been $0.56 (4.84%), that's slightly above the last trading month's daily average range of $0.50. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently strongly higher than usual for GT.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Black Candle showed up on Tuesday, GT actually gained 2.51% on the following trading day.
Prices broke below the key technical support level at 11.11 (now R1), which is likely to act as resistance going forward.
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 13.38.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
2019's low at 10.74 is within reach and we might see further downside momentum should the stock break out beyond.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Its common bearish interpretation has been confirmed for The Goodyear. Out of 212 times, GT closed lower 57.08% 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 53.30% with an average market move of -0.51%.