GVA finds buyers at key support level
Granite Construction Incorporated (GVA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
GVA ended the week 15.9% higher at 16.40 after edging lower $0.10 (-0.61%) today on low volume, underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (GVA as at May 22, 2020):
Friday's trading range has been $0.71 (4.28%), that's below the last trading month's daily average range of $0.99. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for GVA. Prices continued to consolidate within a tight trading range between 15.86 and 16.87 where it has been caught now for the last three trading days.
One bearish candlestick pattern matches today's price action, the Hanging Man. The last time a Hanging Man showed up on April 24th, GVA actually gained 6.71% on the following trading day.
After trading down to 15.86 earlier during the day, the market bounced off the key technical support level at 16.36 (S1). The failure to close below the support might increase that levels importance as support going forward.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Buying could accelerate should prices move above the nearby swing high at 16.87 where further buy stops might get activated. Further buying could move prices higher should the market test April's close-by high at 18.15.
Among the three 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 Granite Construction. Out of 424 times, GVA closed higher 54.48% 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 six trading days, showing a win rate of 52.59% with an average market move of 0.29%.