GT breaks below Tuesday's low
The Goodyear Tire & Rubber Company (GT) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GT finished Wednesday at 9.27 tanking $0.35 (-3.64%), significantly underperforming the S&P 500 (-0.46%). This is the biggest single-day loss in over a month. Today's close at 9.27 marks the lowest recorded closing price since August 6th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 9.58, The Goodyear confirmed its breakout through the previous session low after trading up to $0.32 below it intraday.
Daily Candlestick Chart (GT as at Sep 16, 2020):
Wednesday's trading range has been $0.35 (3.65%), that's slightly above the last trading month's daily average range of $0.35. 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 GT.
One bearish candlestick pattern matches today's price action, the Black Candle.
The stock closed back below the 50-day moving average at 9.58.
Crossing below the lower Bollinger Band for the first time since March 18th, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 9.60 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on March 18th, GT actually gained 11.60% on the following trading day.
Though the share 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 13 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 54.19% with an average market move of -0.54%.