GT runs into sellers again around 10.34
The Goodyear Tire & Rubber Company (GT) Technical Analysis Report for Aug 12, 2020 | by Techniquant Editorial Team
GT ended Wednesday at 9.84 losing $0.25 (-2.48%), significantly underperforming the S&P 500 (1.4%). Closing below Tuesday's low at 10.03, the market confirmed its breakout through the prior session low after trading up to $0.29 below it intraday.
Daily Candlestick Chart (GT as at Aug 12, 2020):
Wednesday's trading range has been $0.60 (5.87%), that's far above the last trading month's daily average range of $0.41. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GT.
Even with a strong opening The Goodyear closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on July 9th, GT actually gained 8.30% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 10.03 (now R1), which is likely to act as resistance going forward. After having been unable to move above 10.37 in the prior session, the share ran into sellers again around the same price level today, failing to move higher than 10.34.
While the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Trading close to June's high at 10.51 we might see further upside momentum if potential buy stops at the level get triggered.
Among the seven 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 203 times, GT closed lower 56.65% 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 53.69% with an average market move of -0.54%.