GWW finds buyers at key support level
W.W. Grainger Inc. (GWW) Technical Analysis Report for Oct 23, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, GWW ended the week -5.87% lower at 361.03 after losing $0.99 (-0.27%) today, underperforming the S&P 500 (0.34%). Today's close at 361.03 marks the lowest recorded closing price since October 2nd. Trading $4.63 higher after the open, W. W. Grainger was unable to hold its gains as the bears took control ending the day below its opening price. The last time this happened on Wednesday, GWW lost -3.06% on the following trading day. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (GWW as at Oct 23, 2020):
Friday's trading range has been $7.81 (2.15%), that's slightly below the last trading month's daily average range of $8.75. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GWW.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
After trading down to 359.99 earlier during the day, the stock bounced off the key technical support level at 361.02 (S1). The failure to close below the support might increase that levels significance as support going forward. The market closed below the 50-day moving average at 361.52 for the first time since September 25th.
Though the share is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Selling might speed up should prices move below the nearby swing low at 352.76 where further sell stops could get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bearish Break through SMA 50" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for W. W. Grainger. Out of 89 times, GWW closed higher 58.43% 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 58.43% with an average market move of 1.01%.